Amazon has reportedly paused its data centre leasing negotiations for its cloud division across international markets. According to CNBC, which quoted insights from Wells Fargo analysts, the pause indicates a broader trend among major tech companies reassessing their spending on AI infrastructure amid rising economic uncertainty.
“Over the weekend, we heard from several industry sources that AWS has paused a portion of its leasing discussions on the colocation side (particularly international ones),” the Wells Fargo analysts wrote in a note.
The extent of Amazon’s leasing pause is not clear. However, it mirrors a similar approach recently taken by Microsoft, another major player in the cloud industry. Last month, Redmond cancelled data centre projects in the US and Europe, citing an oversupply relative to its current demand forecasts.
According to Reuters, Amazon has not cancelled any signed deals. Instead, it is evaluating its recent aggressive leasing activities. “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,” Wells Fargo analysts stated in a note.
Amazon addresses leasing strategy speculations
In response to the analysts’ note, AWS Global Data Centers Vice President Kevin Miller emphasised that there have been no fundamental changes to AWS’s expansion plans. “We have almost two decades of experience delivering data centre capacity to meet customer demands, when and where they need it,” Miller wrote on LinkedIn. “That experience has taught us to consider multiple solutions in parallel.”
“Some options might end up costing too much, while others might not deliver when we need the capacity. Other times, we find that we need more capacity in one location and less in another. This is routine capacity management, and there haven’t been any recent fundamental changes in our expansion plans. Fortunately for our customers, they’re able to focus on their business and leave these details to us.”
The technology sector is grappling with the potential impact of tariffs proposed by US President Donald Trump. The tariffs could lead to increased costs for imported equipment and potentially slow down the economy. Stocks of several tech companies, including Apple, Microsoft, and Google-parent Alphabet, have dropped to near one-year lows two weeks ago due to fears of a global tariff war. This economic pressure has led tech companies to adopt a more cautious stance on investments and spending.
Meanwhile, Amazon continues to invest heavily in generative AItechnologies, such as chatbots for various market segments. Company CEO Andy Jassy also defended these investments recently, stating that they are crucial for maintaining a competitiveness.
Read more: Gen AI to double global data centres’ electricity consumption by 2030
