Amazon to build $1.3bn Australian defence cloud

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Amazon’s cloud services division has won a A$2bn ($1.3bn) contract with the Australian government to build three data centres for secure sharing of information with allies.

Amazon Web Services already provides cloud computing services to the US and UK governments. The contract means Australia will have greater ability to share intelligence and military information and use artificial intelligence for data analysis.

Australia is a member of the Five Eyes intelligence alliance, which also comprises the US, UK, New Zealand and Canada.

Defence minister Richard Marles said the deal would increase “interoperability” with the US and “ensure we have a far more resilient, capable, lethal, modern and potent defence force in the future”.

Rachel Noble, director-general of the Australian Signals Directive, said the use of cloud-based AI would strengthen the country’s intelligence work across 10 different government agencies. “It’s a game-changer in terms of how we understand the data we are holding,” she said of the use of AI to collect, interpret and triage data of importance to national security.

Mike Bareja, deputy director of the ASPI think-tank’s cyber, technology and security unit, said the AWS contract would play to the strategic imperative of allies in the Indo-Pacific, including Five Eyes and the smaller Aukus group, to create a platform for data sharing that goes beyond the secure sharing of classified documents.

He argued that future autonomous weapons systems, for example, would require data sharing and a unified cloud. “Intelligence and military operations are now data operations,” Bareja said, adding that the cloud platform and AI would enable faster decision-making by government agencies and build a stronger platform for Pillar II, the part of the Aukus pact that promotes sharing of advanced technology.

AWS has fashioned a strong position in “top secret” cloud contracts around the world since it won a $600mn contract with US intelligence services in 2013. That deal was later expanded to include other companies including Microsoft and IBM.

The UK government followed suit in 2021 when its top three intelligence agencies signed a cloud contract with AWS, worth up to £1bn at the time, to bring AI and data sharing to the heart of their operations.

The three dedicated data centres will be funded by Australia’s existing pledge to boost defence spending substantially to prepare to “resist coercion” in the Indo-Pacific as geopolitical tension with China has grown.

It has overhauled its defence strategy and committed to a significant upgrade to its naval fleet, including the delivery of nuclear-powered submarines to the country for the first time under the Aukus agreement.

The announcement of the AWS contract coincided with an incident at the Australian parliament in which a group of protesters scaled the building’s roof and unveiled banners that included the inverted red triangle symbol criticising the government’s position on the war in Gaza.

Bareja said the protest highlighted the challenge that intelligence services faced in developing high-tech strategic capabilities but also in dealing with more basic security threats from individuals. “It’s a dichotomy that is defining the security debate,” he said.