Snap Committed to Spend $1 Billion on Web Services With Amazonby
Amount is in addition to $2 billion with Alphabet’s Google
Snap may eventually invest to build its own infrastructure
Details of the deal were released Thursday in an update to Snap’s initial public offering documents. Snap will pay Amazon $50 million in 2017 and then spend progressively more on the e-commerce giant’s cloud and infrastructure services through 2021.
Snap outsources the heavy-lifting of data storage to outside companies rather than building its own server warehouses. Splitting the work between Google and Amazon decreases the company’s reliance on a single company. The filing also states Snap could still build its own infrastructure.
Snap, a photo and video-sharing app popular with teens and millennials, filed for an initial public offering last week. The company is seeking a valuation of as much as $25 billion.