Amazon shelves West Auckland data centre, takes $45m write-down

Key facts

• Amazon Data Services New Zealand Ltd recorded a $44.9 million impairment in 2025 on land at Westgate, Auckland.
• The company spent approximately $33 million acquiring 41,774 sq m of land, the size of four rugby fields.
• Amazon announced the $7.5 billion project in 2021, promising 1,000 jobs and three data centres.
• Contractor Naylor Love began earthworks but ceased within weeks; the site now sits empty with only a security guard.
• Amazon pivoted to co-location, leasing capacity in third-party data centres including those owned by Infratil's CDC.
• AWS's New Zealand cloud region launched in September 2025, a year late, running on rented infrastructure.
• The write-down pushed Amazon Data Services to a pre-tax loss of $36 million in 2025, reversing a prior-year profit.
• Assets under construction dropped to zero, while equipment on books surged to over $250 million and lease assets to about $285 million.

A $45 million hole in the ground

Amazon's New Zealand data centre arm has abandoned plans for a hyperscale facility in West Auckland, taking a $44.9 million impairment that pushed the subsidiary to a $36 million pre-tax loss in 2025. The write-down, disclosed in newly filed accounts for Amazon Data Services New Zealand Ltd, reflects a decision not to proceed with development on a 41,774 sq m site at Westgate — land the company had acquired between June 2022 and January 2025 for roughly $33 million. The site, now reduced to a recoverable value of $62.7 million, sits bare. Contractor Naylor Love, which began earthworks before abruptly stopping, declined to comment, citing a non-disclosure agreement. When the New Zealand Herald visited in February 2025, only a security guard and a single Naylor Love employee were present.

From grand promises to empty land

In 2021, Amazon Web Services told then-Prime Minister Jacinda Ardern it would invest $7.5 billion over 10 years to build three independent data centres in Auckland, creating 1,000 jobs and adding $10.8 billion to the local economy over 15 years. Ardern became an advocate and was the first to publicly announce the project. The Overseas Investment Office granted consent in March 2022, valuing the property and business establishment at $250–350 million. But the project stalled. In early 2024, Auckland Council confirmed unresolved stormwater discharge issues had put the consent process on hold. A drainage standoff with the council had already nixed the original plan to open the data centre by the end of 2024. Although the council later said all drainage and consent issues were resolved, Amazon had already decided to walk away. Rising power prices were also cited as a key factor in the eventual abandonment.

A strategic pivot to leasing

Instead of building its own facility, Amazon shifted to a 'lease-and-equip' model, buying server racks and networking gear to install in third-party data centres. Between December 2024 and December 2025, the value of equipment on its books surged from about $5 million to over $250 million, while lease assets climbed from roughly $244 million to about $285 million, with an additional $162 million in future lease commitments yet to begin. Assets under construction dropped to zero. Amazon's total assets in New Zealand now exceed $650 million, but the capital is being deployed into rented space rather than new builds. The company's cloud region, which launched in September 2025 — a year late — runs entirely on co-located infrastructure, reportedly including facilities owned by Infratil's CDC. At the launch ceremony, Prime Minister Christopher Luxon attended, but the Westgate site remained empty; photos and video supplied by Amazon were of overseas data centres.

The $7.5 billion figure under scrutiny

The promised $7.5 billion investment, repeated by the government, has drawn skepticism. In August 2025, Forrester VP and principal analyst Sam Higgins warned that such economic impact studies 'have become as common as cloud services these days' but are rarely validated after the fact, calling the GDP claims 'rallying cries for market share rather than anything designed to prove the delivery of real or measurable outcomes.' Academic reviews suggest such studies can overstate benefits by 30–60 percent. Tech commentator Peter Griffin advised taking the figures 'with a pinch of salt,' noting AWS had extrapolated downstream economic activity and 'probably adding in a healthy margin as well.' Catalyst IT managing director Don Christie estimated only a few dozen direct jobs at most, not 1,000. Dita de Boni in The Spinoff put it most sharply: 'Amazon Web Services is somehow classing its own paying of its power bill as an investment in New Zealand.'

Resilience concerns for AWS customers

The co-location model raises practical concerns for businesses running on AWS. Christie warned that AWS's local availability zones are less robust than they should be given New Zealand's seismic risk. Purpose-built hyperscale data centres are engineered for earthquake resilience in ways that co-located racks in a third-party facility may not be. Customers who signed up for the promised local data centres — including the Ministry of Justice, Air New Zealand, and ANZ Bank — are getting local data residency, but may not be getting the resilience architecture they expected. The identity of the facilities hosting their data remains secret.

Open questions and the future of Amazon's NZ footprint

Amazon's decision leaves a 41,774 sq m site in limbo, with no clear plans for its use. The company has not commented on whether it will sell the land or repurpose it. Meanwhile, AWS's revenue in New Zealand nearly doubled last year, and the company spent about $350 million renting space in other data centres, suggesting strong demand for cloud services. The gap between the original vision and the current reality is stark. What was once touted as a transformative investment now consists of an empty lot and server racks in other companies' buildings. The government continues to celebrate the $7.5 billion figure, but the actual capital deployed — and the jobs created — look nothing like what was promised.

The bottom line

• Amazon abandoned its planned hyperscale data centre in West Auckland, taking a $44.9 million write-down and leaving a 41,774 sq m site empty.
• The company spent roughly $40 million on the project, including $33 million on land, before pivoting to a lease-and-equip model.
• The $7.5 billion investment figure, repeated by the government, has been criticized as inflated and unvalidated, with independent analysts estimating far fewer jobs and economic impact.
• AWS's New Zealand cloud region launched a year late and runs on rented infrastructure, raising concerns about earthquake resilience for customers like the Ministry of Justice and Air New Zealand.
• Amazon's total assets in New Zealand exceed $650 million, but capital is now directed to leasing and equipment rather than construction, with assets under construction falling to zero.