September 1, 2025 • 12 mins
A tech commentator has weighed in on the arrival of Amazon's new Auckland-based data centres, which are set to be built in Auckland.
The tech giant's investing $7.5 billion dollars into the centres, which go live today.
It'll allow New Zealand customers to store data locally and speed up cloud-based services.
Peter Griffin joined the Afternoons team to explain further.
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Speaker 1 (00:09):
You're listening to a podcast from News Talk ZEDB. Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
What do we make of the Amazon Web services announcements
and the data centers? Peter Griffin is a Wellington based
science and technology journalist with twenty years experience in the
New Zealand media covering science, technology and media and he
joins us on the line now and he's been all
over the story. Peter, A very good afternoon to you.
Speaker 3 (00:34):
Good afternoon, Hey, let's go right back to basics. A.
What are we talking about here? What is a data center?
And what are they looking at building aws?
Speaker 4 (00:44):
Well, you know, we've all moved into the digital world
over the last twenty years, and it used to be
that a lot of those computer service they sat all
over the place and businesses all over our major cities.
And it's become a lot more efficient over the last
ten to fifteen years to move all of that computer
equipment into centralized facilities called data centers, where there are
(01:09):
racks and racks and racks of this equipment. It's more
efficient to power these facilities, easier to secure them, and
to have lots of computer capacity in one place. So
that's not a new thing, but we've sort of missed
out until recently on the big data center boom that's
happened overseas, where the likes of Amazon, Microsoft, and Google
(01:31):
have been spending billions and billions on these data centers.
About four years ago, Amazon said it was actually going
to start building these data centers in New Zealand. It's
been a long process since then. The economy has sort
of tanked since they made this announcement. But just today
they announced they're open for business finally for these data
centers in the Auckland region and the investment they claim
(01:54):
will be seven and a half billion over fifteen years
between building the things, staffing them, and the training that
goes along with encouraging kiwis to use them.
Speaker 3 (02:05):
So they are actually going to build the centers, and
there's talk about three availability zones, so they have committed
to actually building these three physical structures in New Zealand.
Speaker 4 (02:18):
Well it's interesting because they I think at one point
they set out to physically build at least one data center,
but they ran into trouble in West Auckland with the
site that they chose with drainage there, so all works
stopped on that and it hasn't continued. What they've pivoted
to is basically using co location, which is putting all
(02:40):
of your equipment and infrastructure into other people's data centers. Now,
they won't say who those companies are. I've got my
suspicions because there's only a small number of companies in
the Auckland region doing it. Aws Amazon say, it doesn't
really matter who it is. We can tell you from
a security point of view, but we have three facilities
(03:01):
that if there's an emergency, like one of them is
knocked out, there's always going to be backup capacity. They
will automatically switch over to these other two that are
within one hundred kilometers of the other one.
Speaker 3 (03:15):
So is that just going to be a temporary situation
cookooing and on those other centers and they're eventually going
to continue to build they actually build these things because
I say that that drainage issue has been solved now
or is that just going to be it? Are they
just are they going to slide them in with existing
data centers?
Speaker 4 (03:34):
Well, for the moment that they're saying they've got the
three data centers they're co locating at the moment, But look,
you know, this is a very fast growing area, particularly
with the advent of artificial intelligence, the likes of chat,
GPT type services. Amazon service up its own services and
allows any New Zealand business to do that. So the
(03:55):
growth is pretty much exponential in the data and the
computing power that you need to run all of this
artificial intelligence stuff. So there's a good chance they do
own that patch of land. If they can remediate that proper,
properly in the coming years, they will have space to
build another one, and I think we'll see Microsoft, Google
(04:18):
and others doing that as well.
Speaker 3 (04:20):
So the seven point five billion dollar figure that we've
been hearing in the one thousand jobs, is that still
a thing. Is that still going to happen even if
there isn't just yet any construction.
Speaker 4 (04:33):
Yeah, well, they've committed again today to all of those figures.
So the thousand staff, they've been pretty clear from the
start that most of those staff will not be in
construction or in aws own workforce. The thousands, the thousand
jobs that are going to be created come downstream, so
(04:56):
all the startups that it's easier for them to spin
up a company and use all of these AI tools
in the cloud in this local data center. They're saying
that there's going to be more economic development as a
result of more companies using the cloud. So that's where
the bulk of the job numbers come from. One hundred
thousand ki We's trained sounds really impressive. They've already done
(05:19):
fifty thousand, but it's hard to know exactly. You know,
it's that a free sort of two hour course you
can do an internet Yeah, you kind of.
Speaker 3 (05:26):
I use cloud storage every day. Does that mean I'm trained?
Speaker 4 (05:30):
Well, you'd probably have to go onto a ws's website
and do a tutorial or something like that. So there'll
be a lot of people in that boat. But the
reality is, you know, we've got a bit of a
crisis in our education system at the moment. But the
reality is if you can go now out of high school,
you can do an eight week or twelve week course
(05:52):
and become proficient in the entry level stuff to work
on cloud platforms, and that potentially is a pathway to
a seventy or eighty thousand dollars job. So I think
there is something in this that we get hung up
about tertiary qualifications and that when actually know these sorts
of companies salesforces, a lot of them offering free qualifications
(06:14):
and certifications that you can get. The flip side of
that is that they want you tied to their platform.
They want you an expert in Salesforce or SAP or Amazon.
They don't care about giving you general artificial intelligence skills.
It's really about building a workforce for their platform. Yeah.
Speaker 2 (06:31):
Interesting, there's been a lot of concern about this deal
when the energy consumption and whether we've got the energy
infrastructure to supply the likes of these data centers. Is
that a fair criticism and could that be why the
infrastructure of these data centers has been holded.
Speaker 4 (06:46):
Yeah. I don't think it's altered them or led to
any delays, but it is a valid issue because the
government is basically when they look at the future energy
makeup of New Zealand and usage, they're saying by twenty thirty,
potentially up to seven percent off energy use could be
for data centers. That shows just how this digital economy
(07:07):
is growing for quickly. There is a lot of renewable
energy coming online and it's sort of notable that AWS
has done a specific deal with Mercury to use wind
energy from the Turretia South wind farm. So they've done
a long term deal to get guaranteed access to energy.
(07:29):
Contact Energy did a similar deal with Microsoft, a ten
year deal. So these big tech companies have come in here,
they've locked up deals with these energy companies, and the
energy companies are basically saying this is essential to us
commissioning new wind farms solar farms. If we have big
anchor tenants in the form of these tech companies, that
(07:52):
gives us the confidence to raise investment and build more
of these. The question is we're already very strained in
our energy capacity. If we have a winter where the
lake levels are very low, where there is much wind
and people are using energy in the evening during the winter,
is this going to put pressure on our overall grid
(08:13):
And potentially that is the case. Unless we can get
enough capacity that's going to be coming online in the
next five to ten years to absorb this new demand
from data.
Speaker 3 (08:23):
Centers, well, surely all hands should be the will to
do that. We should be a nation within all our
assets of the hydropower, etc. That we can build further
support to the grid such that huge companies can come
in here and invest. If we don't do that, then
we're kind of stuck in a cycle of nothing big
ever happening. When it comes to the data, Peter, is
(08:45):
it just New Zealand data that they're looking at storing
here or is it data from all around the world.
And if that's the case, what is our capacity for
bringing data in and out of the country.
Speaker 4 (08:57):
Yeah, Look, I think the actual physical types that transfer
data in and out of the country is an issue.
There's lots of capacity there. You've got a new players
that have plans for even more subse cable, so I
don't think that's an issue. If you're a New Zealand company.
One of the big pitches here is not only are
(09:19):
you closer to a data center, so if you're doing
a real time service like a chatbot, you know the
delay or lag in getting an answer back will be
lower because it's just going to Auckland for it rather
than Silicon Valley or Australia. So that's a pitch. But
also you can keep all of your data within New
Zealand's borders. So a lot of companies and government departments
(09:43):
are a bit leary about sending a lot of sensitive
data overseas to other jurisdictions. So aws is saying, we
can guarantee all the data if you want it to
stay within New Zealand, we can guarantee that you will
do that.
Speaker 3 (09:58):
Why do you think there's everyone's lining up to be
negative about this thing across the media. There's a lot
of stones being thrown at the thing. Do you think
it's it's a positive thing and what do you think
people are being negative about it?
Speaker 4 (10:12):
I think overall, you know, we're in an environment where
and we've just seen discussion of this with the you know,
the five million dollar home threshold that Winston Peters has
has struck a deal around. It's really difficult to get
companies and high net worth individuals to invest in New
Zealand where a developed country, but we just don't fit
(10:36):
their investment profile a lot of them. So anything where
we're seeing literally billions of dollars come in an investment,
that is a really good thing. But the worm has
turned a little bit on on big tech when it
comes to these data centers because it really is shoring
up that's sort of cozy duopoly or you know, oligopoly
(10:57):
that these companies have over our data and increasingly over
our energy supply as well, and a lot of people
are like, where is the sovereignty. How do we steer
our own destiny rather than just give all of our
valuable data to these three or four big American companies.
Speaker 3 (11:12):
Yeah, yeah, interesting. So just to clarify, this will primarily
be New Zealand data as opposed to you know, just
increasing capacity for Amazon's data storage around the world and usage.
Speaker 4 (11:27):
Yeah, well, it's not efficient for them to be sending
you loads of data from other parts of the world here.
This will be primarily for New Zealand users, and that's
going to be the big question. You know, Amazon did
four hundred and twenty odd million in revenue in New
Zealand last year. Is there actually, given this sluggish economy,
enough growth for them to make a decent return on
(11:47):
this in the next few years. That's going to be
the question.
Speaker 2 (11:50):
Yeah, Peter, really good to get your analysis and thoughts.
Thanks so much for joining us.
Speaker 4 (11:55):
Thanks very much.
Speaker 2 (11:55):
That is Peter Griffin, tech commentator and some interesting thoughts there.
So ken you hear from you.
Speaker 1 (12:01):
For more from News Talks at b Listen live on
air or online, and keep our shows with you wherever
you go with our pot casts on iHeartRadio
You're listening to a podcast from News Talk ZEDB. Follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
What do we make of the Amazon Web services announcements
and the data centers? Peter Griffin is a Wellington based
science and technology journalist with twenty years experience in the
New Zealand media covering science, technology and media and he
joins us on the line now and he's been all
over the story. Peter, A very good afternoon to you.
Speaker 3 (00:34):
Good afternoon, Hey, let's go right back to basics. A.
What are we talking about here? What is a data center?
And what are they looking at building aws?
Speaker 4 (00:44):
Well, you know, we've all moved into the digital world
over the last twenty years, and it used to be
that a lot of those computer service they sat all
over the place and businesses all over our major cities.
And it's become a lot more efficient over the last
ten to fifteen years to move all of that computer
equipment into centralized facilities called data centers, where there are
(01:09):
racks and racks and racks of this equipment. It's more
efficient to power these facilities, easier to secure them, and
to have lots of computer capacity in one place. So
that's not a new thing, but we've sort of missed
out until recently on the big data center boom that's
happened overseas, where the likes of Amazon, Microsoft, and Google
(01:31):
have been spending billions and billions on these data centers.
About four years ago, Amazon said it was actually going
to start building these data centers in New Zealand. It's
been a long process since then. The economy has sort
of tanked since they made this announcement. But just today
they announced they're open for business finally for these data
centers in the Auckland region and the investment they claim
(01:54):
will be seven and a half billion over fifteen years
between building the things, staffing them, and the training that
goes along with encouraging kiwis to use them.
Speaker 3 (02:05):
So they are actually going to build the centers, and
there's talk about three availability zones, so they have committed
to actually building these three physical structures in New Zealand.
Speaker 4 (02:18):
Well it's interesting because they I think at one point
they set out to physically build at least one data center,
but they ran into trouble in West Auckland with the
site that they chose with drainage there, so all works
stopped on that and it hasn't continued. What they've pivoted
to is basically using co location, which is putting all
(02:40):
of your equipment and infrastructure into other people's data centers. Now,
they won't say who those companies are. I've got my
suspicions because there's only a small number of companies in
the Auckland region doing it. Aws Amazon say, it doesn't
really matter who it is. We can tell you from
a security point of view, but we have three facilities
(03:01):
that if there's an emergency, like one of them is
knocked out, there's always going to be backup capacity. They
will automatically switch over to these other two that are
within one hundred kilometers of the other one.
Speaker 3 (03:15):
So is that just going to be a temporary situation
cookooing and on those other centers and they're eventually going
to continue to build they actually build these things because
I say that that drainage issue has been solved now
or is that just going to be it? Are they
just are they going to slide them in with existing
data centers?
Speaker 4 (03:34):
Well, for the moment that they're saying they've got the
three data centers they're co locating at the moment, But look,
you know, this is a very fast growing area, particularly
with the advent of artificial intelligence, the likes of chat,
GPT type services. Amazon service up its own services and
allows any New Zealand business to do that. So the
(03:55):
growth is pretty much exponential in the data and the
computing power that you need to run all of this
artificial intelligence stuff. So there's a good chance they do
own that patch of land. If they can remediate that proper,
properly in the coming years, they will have space to
build another one, and I think we'll see Microsoft, Google
(04:18):
and others doing that as well.
Speaker 3 (04:20):
So the seven point five billion dollar figure that we've
been hearing in the one thousand jobs, is that still
a thing. Is that still going to happen even if
there isn't just yet any construction.
Speaker 4 (04:33):
Yeah, well, they've committed again today to all of those figures.
So the thousand staff, they've been pretty clear from the
start that most of those staff will not be in
construction or in aws own workforce. The thousands, the thousand
jobs that are going to be created come downstream, so
(04:56):
all the startups that it's easier for them to spin
up a company and use all of these AI tools
in the cloud in this local data center. They're saying
that there's going to be more economic development as a
result of more companies using the cloud. So that's where
the bulk of the job numbers come from. One hundred
thousand ki We's trained sounds really impressive. They've already done
(05:19):
fifty thousand, but it's hard to know exactly. You know,
it's that a free sort of two hour course you
can do an internet Yeah, you kind of.
Speaker 3 (05:26):
I use cloud storage every day. Does that mean I'm trained?
Speaker 4 (05:30):
Well, you'd probably have to go onto a ws's website
and do a tutorial or something like that. So there'll
be a lot of people in that boat. But the
reality is, you know, we've got a bit of a
crisis in our education system at the moment. But the
reality is if you can go now out of high school,
you can do an eight week or twelve week course
(05:52):
and become proficient in the entry level stuff to work
on cloud platforms, and that potentially is a pathway to
a seventy or eighty thousand dollars job. So I think
there is something in this that we get hung up
about tertiary qualifications and that when actually know these sorts
of companies salesforces, a lot of them offering free qualifications
(06:14):
and certifications that you can get. The flip side of
that is that they want you tied to their platform.
They want you an expert in Salesforce or SAP or Amazon.
They don't care about giving you general artificial intelligence skills.
It's really about building a workforce for their platform. Yeah.
Speaker 2 (06:31):
Interesting, there's been a lot of concern about this deal
when the energy consumption and whether we've got the energy
infrastructure to supply the likes of these data centers. Is
that a fair criticism and could that be why the
infrastructure of these data centers has been holded.
Speaker 4 (06:46):
Yeah. I don't think it's altered them or led to
any delays, but it is a valid issue because the
government is basically when they look at the future energy
makeup of New Zealand and usage, they're saying by twenty thirty,
potentially up to seven percent off energy use could be
for data centers. That shows just how this digital economy
(07:07):
is growing for quickly. There is a lot of renewable
energy coming online and it's sort of notable that AWS
has done a specific deal with Mercury to use wind
energy from the Turretia South wind farm. So they've done
a long term deal to get guaranteed access to energy.
(07:29):
Contact Energy did a similar deal with Microsoft, a ten
year deal. So these big tech companies have come in here,
they've locked up deals with these energy companies, and the
energy companies are basically saying this is essential to us
commissioning new wind farms solar farms. If we have big
anchor tenants in the form of these tech companies, that
(07:52):
gives us the confidence to raise investment and build more
of these. The question is we're already very strained in
our energy capacity. If we have a winter where the
lake levels are very low, where there is much wind
and people are using energy in the evening during the winter,
is this going to put pressure on our overall grid
(08:13):
And potentially that is the case. Unless we can get
enough capacity that's going to be coming online in the
next five to ten years to absorb this new demand
from data.
Speaker 3 (08:23):
Centers, well, surely all hands should be the will to
do that. We should be a nation within all our
assets of the hydropower, etc. That we can build further
support to the grid such that huge companies can come
in here and invest. If we don't do that, then
we're kind of stuck in a cycle of nothing big
ever happening. When it comes to the data, Peter, is
(08:45):
it just New Zealand data that they're looking at storing
here or is it data from all around the world.
And if that's the case, what is our capacity for
bringing data in and out of the country.
Speaker 4 (08:57):
Yeah, Look, I think the actual physical types that transfer
data in and out of the country is an issue.
There's lots of capacity there. You've got a new players
that have plans for even more subse cable, so I
don't think that's an issue. If you're a New Zealand company.
One of the big pitches here is not only are
(09:19):
you closer to a data center, so if you're doing
a real time service like a chatbot, you know the
delay or lag in getting an answer back will be
lower because it's just going to Auckland for it rather
than Silicon Valley or Australia. So that's a pitch. But
also you can keep all of your data within New
Zealand's borders. So a lot of companies and government departments
(09:43):
are a bit leary about sending a lot of sensitive
data overseas to other jurisdictions. So aws is saying, we
can guarantee all the data if you want it to
stay within New Zealand, we can guarantee that you will
do that.
Speaker 3 (09:58):
Why do you think there's everyone's lining up to be
negative about this thing across the media. There's a lot
of stones being thrown at the thing. Do you think
it's it's a positive thing and what do you think
people are being negative about it?
Speaker 4 (10:12):
I think overall, you know, we're in an environment where
and we've just seen discussion of this with the you know,
the five million dollar home threshold that Winston Peters has
has struck a deal around. It's really difficult to get
companies and high net worth individuals to invest in New
Zealand where a developed country, but we just don't fit
(10:36):
their investment profile a lot of them. So anything where
we're seeing literally billions of dollars come in an investment,
that is a really good thing. But the worm has
turned a little bit on on big tech when it
comes to these data centers because it really is shoring
up that's sort of cozy duopoly or you know, oligopoly
(10:57):
that these companies have over our data and increasingly over
our energy supply as well, and a lot of people
are like, where is the sovereignty. How do we steer
our own destiny rather than just give all of our
valuable data to these three or four big American companies.
Speaker 3 (11:12):
Yeah, yeah, interesting. So just to clarify, this will primarily
be New Zealand data as opposed to you know, just
increasing capacity for Amazon's data storage around the world and usage.
Speaker 4 (11:27):
Yeah, well, it's not efficient for them to be sending
you loads of data from other parts of the world here.
This will be primarily for New Zealand users, and that's
going to be the big question. You know, Amazon did
four hundred and twenty odd million in revenue in New
Zealand last year. Is there actually, given this sluggish economy,
enough growth for them to make a decent return on
(11:47):
this in the next few years. That's going to be
the question.
Speaker 2 (11:50):
Yeah, Peter, really good to get your analysis and thoughts.
Thanks so much for joining us.
Speaker 4 (11:55):
Thanks very much.
Speaker 2 (11:55):
That is Peter Griffin, tech commentator and some interesting thoughts there.
So ken you hear from you.
Speaker 1 (12:01):
For more from News Talks at b Listen live on
air or online, and keep our shows with you wherever
you go with our pot casts on iHeartRadio
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