Apple will decrease usage of Amazon AWS

Apple is currently building 2.5mm square feet of data center space, which is nearly 40% of Amazon’s existing datacenter square footage at the end of 2015. DCI expenditure is one of the main drivers of 30% YoY capex growth at Apple.

Morgan Stanley estimates Apple will spend about $1B on Amazon AWS in 2016, which is around 10% of total AWS revenue. This could move internal within 2 years.

Apple DCI capex is now extremely material.