Amazon's Region Flex cuts Dublin footprint 40% as power crunch hits

Amazon's online retail business is dismantling its reliance on a handful of large AWS hubs, moving workloads across more cloud regions as power constraints reshape how the world's largest e-commerce operator runs its infrastructure.

"Even at that amount, we will still not have enough capacity to meet all the demand we have in 2026," Andy Jassy, Amazon's chief executive, said on the company's earnings call last month, adding he expected the same dynamic in 2027.

The multiyear effort, known internally as "Region Flex," aims to reduce Amazon's e-commerce concentration in major AWS hubs such as Northern Virginia and Dublin, Ireland, according to internal planning documents obtained by Business Insider. One plan calls for cutting the Dublin infrastructure footprint by 40 percent through migrations and deprecations in 2025, with a full exit contemplated by the end of 2026. Amazon estimated $90 million in one-time spending on Region Flex in 2025.

The shift carries real costs — infrastructure expenses for services moving from Dublin to Frankfurt and Zaragoza, Spain, could rise 10 to 15 percent — but the alternative is worse. Data center vacancy rates across North America's largest markets fell to a record 1.4 percent at the end of 2025, according to CBRE, and Jassy has called power the "single biggest constraint" on AWS growth.

Dublin's 40% Drawdown

Ireland became one of Europe's biggest data center markets over the past decade, putting significant pressure on the country's electricity system. Amazon's internal plan last year called for reducing the Dublin infrastructure footprint of its e-commerce operation by 40 percent through migrations and deprecations in 2025. It also contemplated fully moving away from Dublin by the end of 2026 and from AWS regions in Northern Virginia and Oregon by 2029.

The internal documents explicitly cite power and capacity constraints as the driving force. One planning document from last year said online retail teams were investing in moving infrastructure out of Dublin "to mitigate expansion risk due to AWS power constraints." A separate online grocery team document said Region Flex was required to ensure Amazon could meet "projected capacity requirements in each region."

Amazon's e-commerce logistics organization described Region Flex as dividing its "service architecture footprint" so it could run "in more AWS regions at a smaller scale, in closer proximity to our customers," according to one planning document from earlier this year. The initiative is being tracked by Amazon's senior leadership team, with teams planning more than 100 software migrations.

Power Shortage Reshapes Hyperscaler Strategy

The industrywide AI boom has sent demand for computing infrastructure soaring while electricity and available data center space have become major constraints on expansion. Amazon is adding enormous amounts of infrastructure to meet demand — in October, the company said it had added more than 3.8 gigawatts of data center capacity over the previous year, doubling its cloud scale since 2022, and expects to roughly double its power capacity again by the end of 2027.

Yet even that pace isn't enough. Jassy called power the "single biggest constraint" last year, and the company still expects shortages to persist through 2027. Limited power availability is pushing more data centers beyond established hubs into smaller markets where electricity can be secured more quickly.

Distributing workloads doesn't necessarily eliminate capacity problems. One of the documents noted "capacity constraints" in the Zaragoza region meant the organization planned to move only 65 percent of its remaining infrastructure costs there, leaving 35 percent in Dublin.

An Amazon spokesperson confirmed Region Flex, adding that official internal documents don't always reflect current plans and described some of the timelines as "not accurate." "Evolving our infrastructure is nothing new — it's something we've done for years to deliver the experience our customers expect from Amazon," the spokesperson said.

The move shows how hyperscalers are adapting to energy constraints at scale. For Amazon, the trade-off is clear: accept higher infrastructure costs from distributed workloads or risk running out of capacity in the regions where its e-commerce business has historically been concentrated. With AWS still unable to meet all demand through 2027, the question is whether Microsoft's Azure and Google Cloud will follow similar decentralization strategies as power becomes the industry's scarcest resource.

This article is for informational purposes only and does not constitute investment advice.