Amazon Follows Microsoft's Lead, Halts Some Data Center Deals — Executive Says 'Routine Capacity Management'

Benzinga
2025.04.22 01:29
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Amazon has paused some data center leasing talks, following Microsoft's lead, as economic uncertainty prompts tech firms to reassess AI infrastructure investments. Kevin Miller, VP of AWS Global Data Centers, stated this is 'routine capacity management' with no fundamental changes in expansion plans. This cautious approach reflects a broader trend among hyperscalers, as companies like Meta and Google continue to pursue leasing deals. Amazon shares fell 3.11% on Monday, marking a 24.02% drop this year, despite a strong growth score of 94.13%.

Amazon.com, Inc. AMZN has paused some of its data center leasing talks, following a similar move by Microsoft Corporation MSFT.

What Happened: Amazon has temporarily halted certain data center lease negotiations for its cloud division, especially in international markets, said Wells Fargo analysts on Monday.

“This is routine capacity management, and there haven’t been any recent fundamental changes in our expansion plans,” said Kevin Miller, vice president of Amazon Web Services (AWS) Global Data Centers, in a LinkedIn post, first noted on Reuters.

Source: LinkedIn

This development signals that growing economic uncertainty may be prompting firms to reassess their multi-billion-dollar investments in AI infrastructure, including costly Nvidia Corporation NVDA chips, noted Reuters.

See Also: Ford Recalls Nearly 150,000 Vehicles Over Brake And Powertrain Issues: NHTSA

Why It’s Important: The decision mirrors actions taken by Microsoft, which abandoned data center projects in the U.S. and Europe due to an oversupply of electricity relative to current demand forecasts.

Hyperscalers are becoming more cautious and selective in their data center leasing for capacity scheduled to come online before the end of 2026, the Wells Fargo analysts noted, according to Reuters.

Although companies like Meta Platforms, Inc. META, Alphabet Inc.’s GOOG GOOGL Google, and Oracle Corp. ORCL continue to actively pursue leasing deals, they said.

Price Action: Amazon shares fell 3.11% on Monday, continuing a broader downward trend that has led to a 24.02% drop so far this year, according to Benzinga Pro.

Despite the slide, Amazon maintains a strong growth score of 94.13% based on Benzinga Edge Stock Rankings. Click here to compare it with top players like Nvidia, Meta, Google, and others.

Photo Courtesy: Shutterstock.com

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