BERLIN, June 19 (Reuters) - Amazon will invest 10 billion euros ($10.75 billion) as demand for its cloud services and retail goods in Europe's biggest economy keeps growing, the US technology and retail company said on Wednesday.

The greater part of the sum, 8.8 billion euros, will be spent by 2026 to expand the cloud infrastructure of its computing unit Amazon Web Service (AWS), as it sees rising potential in Artificial Intelligence (AI)-driven technologies in Europe.

German Chancellor Olaf Scholz praised the investment that would create more than 4,000 jobs this year by saying it underlines the country's attractiveness for investors.

Berlin is dealing with an economic downturn triggered by high energy costs and interest rates, as well as under-investment due in part to red tape.

The announcement brings the total amount of Amazon's planned investments in Germany to 17.8 billion euros.

AWS was considering multi-billion investments in the expansion of its data centres in Italy, Reuters reported in May.

($1 = 0.9307 euros) (Reporting by Andrey Sychev Editing by Madeline Chambers)