Samsung Batteries Could Power Amazon’s Data Centers

Samsung SDI could soon secure a new client in the data center market. The company reportedly is in final talks with Amazon Web Services (AWS) to supply battery systems for data center operations. This could help speed up the Korean battery maker’s earnings recovery, as its electric vehicle business suffers from slower demand.

Samsung’s battery unit could soon enter AWS’s supply chain

According to a report from AsiaToday, Samsung SDI and Amazon Web Services (AWS) are in discussions about a battery supply agreement. The contract has reached the final stage with only the pricing details remaining to be determined. It could be worth up to 1 trillion won ($700 million to $1 billion). The deal involves supplying battery backup units (BBUs) and uninterruptible power supply (UPS) systems for AWS data centers.

AWS is the world’s largest cloud service provider, running data centers around the world. However, these data centers are likely consuming more electricity than before due to the growing adoption of generative AI. As such, the company needs reliable power systems. Samsung SDI’s battery solutions are seen as a solid fit for this need.

“BBU and UPS systems carry high unit prices and often lead to long-term contracts, making them highly meaningful from a profitability standpoint,” said an industry official. “If the AWS deal materializes, it would not only boost earnings but also provide a strong reference with a global big tech client.”

As Samsung SDI’s electric vehicle business slows, it has shifted its focus to its energy storage (ESS) and battery backup (BBU) segments. Thanks to strong demand from data centers, the company is maintaining a more stable earnings structure. If it steps into AWS’s supply chain, it could secure steady, long-term demand while solidifying its role as a key provider of data center power systems.

Speaking of its EV business, Samsung SDI recently inked a multi-year deal with Mercedes-Benz. The Korean firm will supply high-nickel NCM batteries for Mercedes-Benz’s next-generation EVs.