Amazon Web Services (AWS) has reportedly suspended some data centre lease talks for its cloud division amidst economic uncertainty.
According to Reuters, Wells Fargo analysts observed that AWS has halted negotiations on data centre leases in foreign markets, adding that the decision was influenced by growing economic concerns.
On Monday, vice president of AWS global data centres Kevin Miller said in a post on LinkedIn: “This is routine capacity management, and there haven’t been any recent fundamental changes in our expansion plans.”
Although Wells Fargo analysts did not provide details on the scope of the decision, they said the move by the US’ largest cloud service provider was similar to Microsoft’s recent withdrawal from its data centre plans.
Amazon and Microsoft have both promised to significantly increase spending on data centres amid the artificial intelligence boom, with AWS saying it will spend $83 billion and Microsoft $80 billion in 2025 alone, according to statements made in earlier this year.
In March, Microsoft suspended or postponed data centre projects around the world, including those in the United Kingdom, Australia, North Dakota, Wisconsin, and Illinois. The company said the decision was part of a broader strategy to avoid expanding its cloud computing infrastructure too quickly.
Microsoft has cancelled up to two gigawatts (GW) of data centre projects in the US and Europe due to excess supply relative to current demand, TD Cowen analysts said in March.
While Amazon has not cancelled any signed deals, Wells Fargo’s analysts said the tech firm is “digesting aggressive recent lease-up deals.”
“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 added.
To clarify reports on Microsoft’s plans to delay or cancel leases, Microsoft’s president of cloud operations Noelle Walsh said in a LinkedIn post in March: “In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history.”
The president added that, by their nature, plans of this magnitude and scale require agility and refinement as companies learn to grow with their customers.
“What this means is that we are slowing or pausing some early-stage projects. While we may strategically pace our plans, we will continue to grow strongly and allocate investments that stay aligned with business priorities and customer demand,” she added.
