Amazon is also reported to be halting the lease of some data centers. Is the AI computing power boom starting to fade?
Amazon suspends some data center leases, causing its stock price to drop by more than 3%. Wells Fargo analyst Eric Luebchow pointed out that negotiations for AWS leases have been paused, particularly for international leases. While Amazon and Microsoft are contracting, Google, Meta, and Oracle remain active. Luebchow believes this may be a natural fluctuation in hyperscale computing activities, and it is expected to take 6 to 12 months to find capacity again
According to Zhitong Finance APP, on Monday, Wells Fargo pointed out that Amazon (AMZN.US) has suspended some data center leases, causing Amazon's stock price to close down more than 3%. Analyst Eric Luebchow wrote in a report to clients: "Over the weekend, we learned from several industry insiders that AWS has paused some lease negotiations related to hosting (especially international leases)." This is the latest news of a tech giant pausing the expansion of data centers, following Microsoft (MSFT.US).
Luebchow stated: "It is currently unclear how extensive the pause is, but it aligns with what we recently heard from Microsoft — they are digesting recent positive leasing transactions (however, we believe they will not cancel signed transactions; they are just pulling back from a large number of letters of intent or qualifications)."
Luebchow added that while Microsoft and Amazon may be contracting, other hyperscale providers, such as Google (GOOGL.US), Meta (META.US), and Oracle (ORCL.US) are still "active," and the dynamics from Nvidia (NVDA.US) remain "prosperous."
Luebchow mentioned that Amazon's data centers in North America may have over 9 GW of active power capacity, of which about 70% is self-built. He added that assuming this is a potential "digestion" period, it may take 6 to 12 months (or even shorter) to seek more capacity again.
Luebchow pointed out: "It is currently unclear whether AWS's slowdown in some leases is a concerning area or just a natural fluctuation of hyperscale computing activities. It seems that hyperscale companies are becoming more selective in leasing large power clusters and have tightened the pre-leasing window for capacity to be delivered before the end of 2026."