Amazon Breaks Its Cloud-Only Model with On-Premises AI Factories

AWS announced AI Factories, letting corporations and governments deploy AWS AI systems in their own data centers rather than the public cloud. Built with NVIDIA's Grace Blackwell GPUs, the offering targets organizations with strict data sovereignty or compliance requirements. It signals a strategic pivot: cloud providers including Microsoft and Google now offer hybrid options alongside pure cloud, recognizing that forcing cloud-only adoption limits market reach in regulated sectors.