Fire Halts AWS UAE Region; Amazon Shares Drop 12% After $200B Capex Plan
A fire at an AWS data center in UAE ME-Central-1 triggered a power shutdown and rerouted traffic to other zones. Shares fell 12% in February after Amazon unveiled $200 billion in AI and data center capex and a $50 billion OpenAI deal, turning free cash flow negative by $524 million.
1. Outage and Response
A fire at one of AWS’s ME-Central-1 data center facilities in the UAE caused a power shutdown in a single Availability Zone, prompting automatic traffic rerouting to unaffected zones. Engineers worked to restore power and advised customers to shift workloads to other regions while full recovery is expected within several hours.
2. Capex Plans and Financial Impact
In early February Amazon announced a record $200 billion investment in data centers, chips and other equipment for 2026, alongside a $50 billion commitment to OpenAI. These aggressive capex plans will push free cash flow into a $524.2 million deficit, marking the first negative cash flow year since 2022.
3. Market Reaction and Outlook
Shares tumbled 12% in February, the worst month since December 2022, as investors questioned the timing of returns on massive AI and infrastructure spending. Analysts contend future AWS growth may hinge on spending discipline and potential adjustments if return on invested capital continues to decline.