Amazon Halts Data Center Leasing Talks Amid Economic Uncertainty

Amazon.com, Inc. AMZN has paused discussions regarding data center leasing. This decision follows a similar action by Microsoft Corporation MSFT.

Recent Developments

Amazon has temporarily suspended certain negotiations for data center leases, particularly in international markets, as reported by Wells Fargo analysts on Monday.

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

Market Context

This pause suggests a growing caution among firms in evaluating major investments in AI infrastructure, particularly in light of economic uncertainty. High costs associated with Nvidia Corporation NVDA chips may be contributing to this reassessment, as reported by Reuters.

Also read: Ford Recalls Nearly 150,000 Vehicles Over Brake and Powertrain Issues: NHTSA

Importance of This Move

Amazon’s decision reflects similar moves by Microsoft, which has abandoned data center projects in the U.S. and Europe due to a surplus of electricity compared to current demand forecasts. Hyperscalers, including Amazon, are showing increased selectiveness in their data center leasing strategies for projects set to come online before 2026, according to analysts at Wells Fargo.

Despite this cautious approach, other major players in the industry—such as Meta Platforms, Inc. META, Alphabet Inc. GOOG and Google, along with Oracle Corp. ORCL—continue to actively pursue leasing arrangements.

Stock Market Reaction

Following this news, Amazon shares dropped 3.11% on Monday, contributing to a 24.02% decline in stock value year-to-date, according to Benzinga Pro.

Despite the recent downturn, Amazon retains a robust growth score of 94.13% based on Benzinga Edge Stock Rankings. Click here to compare it with industry leaders like Nvidia, Meta, and Google.

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Looking Ahead

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.