Amazon has delayed some commitments around data centers, according to Wells Fargo analysts on Monday. This is the latest indicator of recent economic concerns affecting the spending habits of major tech companies.
This news has come shortly after a Microsoft executive revealed the software company was slowing down or temporarily holding off on advancing early build-outs. The tech giant has also reportedly cancelled data center leases with at least two operators in the U.S. in February and according to analysts at TD Cowen, the company had also decided to scale back plans for international spending.
READ: Microsoft cuts down on data centers and international spending (February 25, 2025)
Amazon Web Services (AWS) and Microsoft are the leading providers of cloud infrastructure, and both have ramped up their capital expenditures in recent quarters to meet the demands of the generative artificial intelligence boom.
“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),” Wells Fargo analysts said. They added that “the positioning is similar to what we’ve heard recently from MSFT” in that both companies are reeling in some new projects but not canceling signed deals.
Tech companies have been facing uncertainty regarding their stocks ever since President Donald Trump announced sweeping tariffs, which raised the prospect for dramatically higher costs on imports of equipment while also threatening to slow the economy.
Cloud infrastructure providers have been aggressively announcing plans to collectively spend hundreds of billions of dollars securing Nvidia’s graphics processing units, or GPUs, and building new data centers, before the announcement on tariffs earlier this month. Microsoft and Amazon both report quarterly results at the end of April. Their stock prices were down on Monday, bringing Amazon’s decline for the year to 25% and Microsoft’s drop to 15%.
READ: Nvidia loses $600 billion amid DeepSeek rise (January 28, 2025)
Amazon CEO Andy Jassy told CNBC in March that he did not see the company cutting down on data center construction. “This is routine capacity management, and there haven’t been any recent fundamental changes in our expansion plans,” Kevin Miller, AWS’ vice president of global data centers said, via LinkedIn.