Amazon Slows Data Center Plans Amid Economic Concerns

Amazon Web Services (AWS) has paused some of its data center leasing negotiations, particularly in international markets, following a similar move by Microsoft to slow or pause early-stage data center projects. Both companies are refraining from canceling existing contracts but are tightening their expansion plans amid economic uncertainty, rising hardware costs, and potential tariff impacts. While AWS claims this is routine capacity management, analysts and market observers suggest these moves reflect a broader reassessment of multi-billion-dollar investments in AI infrastructure. Despite continued aggressive expansion by rivals like Meta and Google, these developments indicate cooling demand for rapid AI-driven data center growth, compounded by concerns over electricity supply and a challenging global economic outlook. Amazon's and Microsoft's stock prices have both declined significantly this year, reflecting investor unease. The industry is watching closely to see if this cautious approach marks a turning point in the cloud sector's expansion strategy.