Amazon halts datacentre leasing talks

Is a slowdown coming?

AWS is scaling back its datacentre plans. Does this signal the start of a wider shift?

Wells Fargo analysts say Amazon has paused some talks on datacentre leasing for its cloud division, especially outside the USA. And while the size of the pause is not clear, Amazon is not the first cloud company to scale back its plans.

According to analysts at TD Cowen, Microsoft has abandoned two datacentre projects in the US and Europe in the last six months, due to an oversupply in its demand forecast.

The move could be a sign that economic uncertainty, stemming from President Trump’s slapdash approach to tariffs, is forcing even global companies to rethink their budgets.

The Wells Fargo analysts, quoted by Reuters, said, "It does appear like the hyperscalers ... 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.”

On the other hand, Amazon disputed Wells Fargo’s note. Kevin Miller, vice president of AWS’ Global Data Centers, said on LinkedIn that the company is still seeing “strong demand for both Generative AI and foundational workloads on AWS.”

He added this latest news is “routine capacity management, and there haven't been any recent fundamental changes in our expansion plans.”

As well as concerns around the economy, rising investor scepticism about artificial intelligence spending - especially in the wake of DeepSeek - is also affecting the appetite for datacentre expansion.

Like other firms, AWS and Microsoft have bet big on AI datacentres, committing to spending $83 billion and $80 billion this year alone.

Other companies like Meta (which has committed to spending $65 billion this year) and Google ($75 billion) have not scaled back their leasing plans, while Oracle is a key player in Project Stargate – the USA’s $500 billion AI infrastructure project announced in January.