- April 23, 2025
- Shatabdi Mazumdar
- AI challenges, AI infrastructure, AI investment, Data center investment, data centre, Digital Infrastructure
According to analysts at Wells Fargo, Amazon has temporarily stepped back from certain data center leasing negotiations for its cloud operations, especially in international markets. This indicates a potential short-term dip in demand for large-scale data center facilities, as reported by Juby Babu for Reuters.
This development, involving the leading cloud services provider in the U.S., adds to growing indications that economic uncertainty is prompting tech firms to reevaluate their substantial investments in AI infrastructure, including high-cost components like Nvidia chips.
The analysts noted that while the full extent of Amazon’s pause remains unclear, it mirrors a recent slowdown by Microsoft. Rather than walking away from any finalized agreements, Amazon appears to be reassessing a series of recent aggressive leasing commitments.
Analysts noted that major cloud providers appear to be taking a more selective approach when it comes to leasing large-scale power capacity, and are also shortening the lead times for space expected to be operational before the close of 2026. Despite this caution, companies like Meta, Google, and Oracle are still actively pursuing new leases.
In a LinkedIn post, Kevin Miller, Vice President of Amazon Web Services Global Data Centers, described the move as standard capacity planning, asserting that there have been no major shifts in the company’s growth strategy.
Meanwhile, investor confidence in U.S. tech giants’ heavy investments in AI infrastructure has begun to waver. Contributing factors include slower-than-expected returns and the emergence of Chinese startup DeepSeek, which recently unveiled competitive AI technology at a significantly lower cost than that of Western companies.
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