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Are uncertainties surrounding Trump’s tariffs prompting tech companies to scale back their spending? According to a CNBC report, Amazon has reportedly postponed certain commitments related to new data center leases, particularly in overseas markets.
Large cloud service providers (CSPs) seem to be adopting a more cautious approach to leasing large blocks of power, according to Reuters. However, Meta, Google (owned by Alphabet), and Oracle remain active in securing leases, Reuters adds.
Amazon CEO Andy Jassy stated that the company is not scaling back its data center construction, as noted by CNBC, earlier this month. In addition, Kevin Miller, AWS’ vice president of global data centers, emphasized in a LinkedIn post that these moves reflect routine capacity management, adding that there have been no recent fundamental changes to their expansion plans.
According to TrendForce, there have been no significant changes in AWS’s order momentum across its supply chain, indicating that the company remains committed to expanding its AI ASIC deployments. As such, recent fluctuations in colocation leasing activity are viewed as a strategic reallocation of internal resources rather than a signal of reduced investment.
However, given the rising uncertainties surrounding geopolitical risks and the tightening of export control regulations, it is possible that AWS and other major cloud service providers may adopt a more conservative approach to capital expenditures in the future, potentially affecting the overall pace of AI infrastructure build-outs, as TrendForce notes.
Microsoft Scales Back Some Expansion, But Maintains AI Investment Plans
Similarly, another Reuters report highlights that Microsoft has canceled data center projects in the U.S. and Europe over the past six months, citing an oversupply relative to its current demand forecast.
The report notes that Microsoft’s decision to pull back on new capacity leasing was largely driven by a move to scale back support for additional training workloads from ChatGPT creator OpenAI.
Despite this, Microsoft emphasized it is only strategically adjusting its infrastructure investments in certain areas, as Reuters highlights. The company also reaffirmed that its plan to spend USD 80 billion on AI infrastructure this fiscal year remains on track.
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(Photo credit: Amazon)
