Amazon is testing out private on-premises 'AI Factories'

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Amazon is testing out private on-premises 'AI Factories' News By Craig Hale published 3 December 2025

Amazon is putting AI hardware on the customer’s doorstep

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• AWS AI Factories put Amazon/Nvidia hardware in customers’ own facilities
• They’re designed to respond to strict data sovereignty/privacy requirements
• A return to on-prem has gained traction in an AI-driven era

Amazon Web Services has revealed more information about its AI Factories – full-stack AI infrastructure that sits inside a customer’s own data center.

This means customers would provide the facility and the power, with Amazon’s cloud division providing and managing AI systems, in a way likening AI Factories to a private AWS region.

Besides giving organizations more control against data sovereignty, security, or regulatory requirements, it also ensures they have access to hardware options, such as Nvidia’s Blackwell GPUs or Amazon’s Trainium3 accelerators.

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AWS AI Factories are on-prem facilities with shares responsibilities

Why would a customer want to increase pressure on itself by becoming responsible for location and power? It’s simple - certain enterprises and governments want access to advanced AI, but they’re limited in terms of the data they can send off-prem.

Building independent AI infrastructure is slow and costly, but AWS says it can deploy these systems in months, helping customers to avoid large capex burdens.

With AWS managing the entire AI environment exclusively for the one customer, data stays local and hardware will not be shared with others.

The shift to on-prem infrastructure is an interesting reverse from the cloud push we’ve seen in recent years, with enterprises largely worried about sensitive data, AI training, and national security.

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“By combining NVIDIA’s latest Grace Blackwell and Vera Rubin architectures with AWS’s secure, high-performance infrastructure and AI software stack, AWS AI Factories allow organizations to stand up powerful AI capabilities in a fraction of the time and focus entirely on innovation instead of integration,” Hyperscale and HPC VP and GM for Nvidia, Ian Buck, commented.

But Amazon isn’t alone in pushing the concept of AI Factories. Microsoft has Azure Local to support sovereignty requirements, comprising Microsoft-managed hardware installed within a customer’s facility.

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TOPICS Nvidia Amazon AI Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!

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