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Amazon Web Services to Deliver Up to $1 Billion in Savings to U.S. Government for Cloud Modernization

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Amazon Web Services (AWS) has entered into an agreement with the U.S. General Services Administration (GSA) to provide federal government agencies with up to $1 billion in savings through incentives aimed at cloud adoption, IT modernization, and training programs. This initiative is set to run through the end of 2028 and is designed to accelerate large-scale digital transformation across government departments while fostering innovation in artificial intelligence.

The U.S. federal government spends over $100 billion annually managing and updating its IT infrastructure, a process historically challenged by outdated systems. AWS, which supports more than 11,000 government agencies worldwide, has secured billions in contracts to assist in transitioning federal agencies to cloud-based platforms.

The $1 billion incentive credits will be distributed across civilian federal agencies and include savings on core AWS cloud services, modernization efforts, and training resources. AWS CEO Matt Garman described the deal as a “significant milestone” in government digital transformation, highlighting the provision of expert support and training to facilitate cloud migration.

The agreement aligns with broader federal efforts to reduce IT costs, improve efficiency, enhance innovation, and maintain U.S. leadership in AI technologies. In recent years, the Pentagon has awarded multi-billion dollar cloud contracts to AWS and other tech giants such as Microsoft, Google, and Oracle. This follows the Joint Warfighting Cloud Capability program, a successor to the controversial $10 billion JEDI contract, which AWS contested after it was awarded to Microsoft amid allegations of political interference.

Apollo Acquires Majority Stake in Stream Data Centers to Capitalize on AI-Driven Infrastructure Growth

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Apollo has agreed to buy a majority interest in Stream Data Centers (SDC) as part of a strategic bet on the booming demand for digital infrastructure driven by artificial intelligence and cloud computing. Data centers, critical hubs housing computing hardware, are expected to see global spending of up to $6.7 trillion by 2030, according to McKinsey.

Stream Data Centers specializes in building, leasing, and managing large-scale data center campuses. It has completed over 20 projects and has an extensive pipeline with multi-gigawatt capacity. Apollo aims to scale SDC to become a key partner for major hyperscalers like Amazon, Microsoft, and Google, who increasingly rely on third-party developers for land acquisition, regulatory approvals, and power sourcing for their data centers.

Apollo partner Trevor Mills emphasized the ongoing and diverse demand from hyperscalers requiring collaboration with external developers. This investment aligns with rising capital expenditures by tech giants — Meta recently raised its annual spending forecast by $2 billion to as much as $72 billion, Microsoft plans over $30 billion in its fiscal first quarter, and Alphabet increased its 2024 capex target to $85 billion, with further rises expected to meet AI demands.

While financial terms were not disclosed, Apollo’s president Jim Zelter highlighted that data centers will need $1.5 trillion in external financing by 2030, with private credit accounting for $800 billion — a space where Apollo leads. The International Energy Agency forecasts electricity demand for data centers will more than double by then, surpassing Japan’s current total consumption.

Other major asset managers like Blackstone, KKR, and BlackRock have also committed billions to data center investments, underscoring the sector’s growing importance. Stream Data Centers’ management will retain a minority stake and continue running operations post-deal.

Google Set to Offer Significant Cloud Service Discounts to U.S. Government, FT Reports

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Google is preparing to offer steep discounts on its cloud computing services to the U.S. government, with a deal possibly finalized within weeks, according to the Financial Times. This move aligns with President Donald Trump’s broader push to reduce federal spending.

Last week, the Wall Street Journal reported that Oracle will provide federal agencies with a 75% discount on its license-based software and a substantial reduction on its cloud services through the end of November. Google’s upcoming cloud contract is expected to offer similar discounts, the FT said, citing a senior official from the General Services Administration (GSA). Discounts from Microsoft Azure and Amazon Web Services are also anticipated to follow soon.

The GSA official told the FT, “Every single one of those companies is totally bought in, they understand the mission. We will get there with all four players.”

Neither Google nor the GSA immediately responded to Reuters’ requests for comment outside business hours. In April, Google agreed to provide a 71% discount on its business apps package for federal agencies through September 30, a deal that could yield up to $2 billion in government-wide savings if broadly adopted.