alt Hacker NewsInsurance. No need to write off anything or take a loss, just a slightly increased yearly cost. The cost of said insurance is likely going to be very high for a long time now though.
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Sure, but insurance is just outsourcing that calculation to a third party. AWS is big enough that I would think they largely self-insure, though I don't know if they do.
My impression is most commercial insurance policies specifically exclude acts of war (and similar). The extent of systematic damage that can occur in such scenarios would easily put them into insolvency. There are exceptions for life insurance, maritime shipping, aviation etc. but I gather they're uncommon, often limited-time in nature and come with high premiums. I've never heard of the equivalent for buildings and contents. Maybe someone can enlighten me.
I also agree with the sibling comment that suggests even if there were outsourced options available, hyperscalers might do better to self-insure.
But regardless whether the company eats it, or pays it through insurance premiums, I'm still curious how this type of risk is planned for (to whatever degree it is) and accounted. I assume it must have been contemplated in a deliberate manner, somewhere on a scale of "We knew this could happen, considered x, y and z, decided the venture was justified, and here's how we planned for such a contingency" to "That was dumb siting and someone will be fired". Obviously anywhere you put a building entails some level of local risk.
As years as a volunteer firefighter we do a lot of risk management at the tactical level and have to think through assessment and potential consequences. There are lots of guidelines we learn to help produce sound decisions. But at the end of the day to apply them you may need to make a judgement call, and you need to be prepared for things to go wrong. In a way I guess I'm asking about the economic and operational equivalent at the scale of hundred-million dollar data centers.
Ps. Like the original commenter said, I'm in no way meaning to be insensitive to the larger human and regional consequences.
I insure a bunch of big datacenters (crypto mining, AI); there are really two main drivers of cost of insurance per $ of equipment:
1) Internal risks and controls within the datacenter (the company involved and their operating history, fires, flood, etc,) -- for a sufficiently "good" datacenter, you can assume it gets maxed out in quality, or at least to the point where it's no longer efficient to spend more. Most of these risks also cause service disruptions, so if you're building for high availability anyway, the rest of this stuff is usually handled as part of that. Essentially, if you're too cheap to build a good enough datacenter to max this out, you're not getting insurance anyway in most cases, so it's not a variable factor so bunch as binary or maybe a few broad risk bands (ISO tier for datacenters).
2) External risks. This is mostly natural catastrophe ("nat cat" or "cat risk"); usually there's one dominant driver of that ("severe convective storms" in Texas; floods and hurricanes in places like Florida; earthquakes in California). In some places it's multiple risks (Japan has both earthquake/tsunami and typhoon). This drives the majority of insurance premium.
War risk, geopolitical, political risk, terrorism, SRCC ("strikes, riots, and civil commotion") are in a third category -- often essentially not a factor (e.g. for a $200mm facility in rural Texas), but often handled through special programs at a national level or specialty insurance. A lot of normal policies exclude or let the client buy-back that part of the risk.
As my personal interests in war zones, drones, etc. and professional interests in crypto, AI, and datacenters seem to have converged, looking forward to seeing "quality of air defense artillery/integrated air defense system" as well as "comprehensive quick reaction force capable of dealing with national-level threats" as elements of insurance underwriting for $50B AI datacenters/"AI factories" in the future. I assume in most cases this kind of stuff will be handled by national, military, defense, or civil defense parts of the government, but could easily be contracted as well. I don't think Oracle Cloud is likely to stand up their own private army though.