(Reuters) - Amazon.com's ( AMZN ) cloud-computing arm said it would invest $11 billion in Indiana to build data centers, marking the state's largest capital investment, and promising at least 1,000 jobs.

The announcement by Amazon Web Services on Thursday builds on the online retail giant's already strong presence in the state, where it employs 26,000 full- and part-time staff.

The new facilities will be build in St Joseph County in north-central Indiana and house computer equipment used to power cloud computing and generative artificial intelligence. Amazon ( AMZN ) did not specify how many data centers would be established.

Big technology companies have been racing over the past year to build data centers needed to power applications such as OpenAI's viral ChatGPT as they try to capitalize on what is expected to be the industry's next key growth driver.

The Indiana Economic Development Corp (IEDC) will offer Amazon Web Services data center sales tax exemptions for eligible capital investments over a 50-year term, the company said.

The IEDC has also agreed to offer some performance-based incentives, including up to $18.3 million in headcount-based tax credits, up to $5 million in training grants and up to $55 million in Hoosier Business Investment tax credits.

"Amazon ( AMZN ) has long been an important economic partner in Indiana, and we are excited to welcome AWS," Governor Eric Holcomb said in a statement.

(Reporting by Aditya Soni in Bengaluru; Editing by Varun H K)