Amazon.com has paused some data center lease talks for its cloud division, particularly in overseas markets, suggesting a short-term slowdown in leasing for large-scale facilities, Wells Fargo analysts said on Monday.
The move by the largest U.S. cloud company is the latest sign that rising economic uncertainty could be forcing companies to rethink how they spend the billions of dollars they have earmarked for AI infrastructure including pricey Nvidia chips.
Wells Fargo analysts said the magnitude of Amazon’s pause was unclear, but it was similar to Microsoft’s recent pullback.
Rather than canceling any signed deals, Amazon is “digesting aggressive recent lease-up deals,” the analysts said.
“It does appear like the hyperscalers (big cloud companies) are being more discerning with leasing large clusters of power, and tightening up pre-lease windows for capacity that (would) be delivered before the end of 2026,” they said in a note, adding that the likes of Meta, Alphabet-owned Google and Oracle remain active in leasing.
Amazon downplayed the note. “This is routine capacity management, and there haven’t been any recent fundamental changes in our expansion plans,” said Kevin Miller, vice president of Amazon Web Services Global Data Centers in a post on LinkedIn.
Rival Microsoft abandoned data center projects set to use 2 gigawatts of electricity in the U.S. and Europe in the last six months due to an oversupply relative to its current demand forecast, TD Cowen analysts had said in March.
Investor skepticism about the hefty artificial intelligence spending by U.S. tech firms has increased due to slow payoffs and the rise of Chinese startup DeepSeek, which showcased AI technology at a much lower cost than its Western rivals.
Like rivals, Amazon is investing heavily in generative AI, including releasing a variety of chatbots serving sellers, businesses and consumers.
