Amazon has postponed certain commitments regarding new data center contracts, Wells Fargo analysts reported on Monday. This is yet another sign that hyperscalers are scaling back their AI data center expansion plans. Amazon appears to have come to exactly the same conclusion as Microsoft, which has also abandoned previously planned data center locations.
A week ago, Microsoft announced that it was suspending some of its data center plans. There had already been signs of such a move, which were highlighted in particular by investment bank TD Cowen. These were striking decisions after Microsoft had previously committed $80 billion to this expansion between mid-2024 and mid-2025 (the tech giant’s financial year).
Economic pressure
“Over the weekend, we heard from several industry sources that AWS has paused some of its lease discussions on the (primarily international) colocation side,” Wells Fargo analysts wrote in a note. They added that “the positioning is similar to what we heard recently from Microsoft,” with both companies scaling back new projects but not canceling signed agreements.
The tech world seems to be forced into making different choices due to geopolitical issues. US President Trump has kicked off a tumultuous stock market by introducing large-scale tariffs. These also have a direct impact on hyperscalers, who regularly source their most critical and valuable equipment from other countries. The most obvious example: Nvidia’s GPU supply. These chips typically come from Taiwan, although the TSMC factory in Arizona is being prepared to produce the latest Blackwell generation of GPUs.
This could reduce costs for Amazon and Microsoft’s plans, but they are not leading the way. These decisions were made before Trump’s tariffs. More clarity will follow when both parties report their quarterly figures next week. Shares already fell in value on Monday, CNBC reports, bringing Amazon’s decline for the year to 25 percent and Microsoft’s to 15 percent.