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\n AWS and Microsoft are pausing or slowing down the signing of leases for data centers, according to a Wells Fargo research note shared with PYMNTS. <\/p>\n<\/p><\/div>\n<\/p><\/div>\n \n Microsoft said it remains on track to spend its 2025 budget of $80 billion or more for data centers but admitted to \u201cslowing or pausing\u201d early-stage projects based on \u201cdemand signals.\u201d <\/p>\n<\/p><\/div>\n<\/p><\/div>\n \n AWS said changes it made to its data center plans are part of \u201croutine capacity management.\u201d <\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/section><\/div>\n AWS<\/span><\/a> and <\/span>Microsoft<\/span><\/a> are pausing or slowing down the development of data centers, according to a <\/span>Wells Fargo<\/span><\/a> research note shared with PYMNTS.<\/span><\/p>\n Several industry sources told Wells Fargo\u2019s analysts team that AWS has \u201cpaused a portion of its leading discussions\u201d on <\/span>colocated<\/span><\/a> data centers, particularly <\/span>those abroad<\/span>.<\/span><\/p>\n \u201cIt\u2019s not clear <\/span>the magnitude<\/span> of the pause<\/span>, but<\/span> the positioning is similar to what we\u2019ve heard recently from Microsoft,\u201d wrote Wells Fargo analyst <\/span>Eric Luebchow<\/span><\/a> in the Monday (April 21) note.<\/span><\/p>\n Last week, <\/span>Noelle Walsh<\/span><\/a>,<\/span> president of Microsoft Cloud Operations and Innovation, disclosed in a <\/span>LinkedIn post<\/span><\/a> that the software giant is \u201cslowing or pausing some early-stage projects\u201d as it refines the buildout of cloud capacity relative to customer demand.<\/span><\/p>\n Microsoft has doubled its data center capacity in the last three years and is on track to spend the <\/span>budgeted<\/span><\/a> amount of $80 billion or more in 2025 \u201cinformed by near-term and long-term demand signals,\u201d Walsh said in the post. Microsoft has more than 350 data centers in at least 60 regions globally.<\/span><\/p>\n Meanwhile, <\/span>Kevin Miller<\/span><\/a>, vice president of global data centers at AWS, explained in a <\/span>LinkedIn post<\/span><\/a> that the change in the hyperscaler\u2019s data center plans is \u201croutine capacity management, and there haven\u2019t been any recent fundamental changes in our expansion plans.\u201d<\/span><\/p>\n AWS continues to see \u201cstrong demand for both generative AI and foundational workloads,\u201d he said in the post.<\/span><\/p>\n Wells Fargo\u2019s Luebchow acknowledged that \u201cit\u2019s not clear yet\u201d that AWS\u2019 slowing of lease signing \u201cis an area of concern or just the natural ebbs and flows of hyperscale activity.\u201d<\/span><\/p>\n AWS has 114 <\/span>availability zones<\/span><\/a> and plans for 12 more in 36 global regions that serve 245 countries and territories. An AWS spokesperson told PYMNTS that availability zones refer to a cluster of one or more discrete data centers. AWS does not disclose its actual data center count.<\/span><\/p>\n Read also:<\/span><\/strong> Nvidia and xAI Sign On to $30 Billion AI Infrastructure Fund<\/span><\/a><\/p>\n Luebchow said other <\/span>major<\/span> data center owners \u2014 <\/span>Meta<\/span><\/a>, <\/span>Google<\/span><\/a> and <\/span>Oracle<\/span><\/a> \u2014 remain \u201cactive\u201d while <\/span>Nvidia<\/span><\/a> is showing<\/span> \u201celevated activity.\u201d<\/span><\/p>\n This<\/span> does not include the $500 billion <\/span>Stargate<\/span><\/a> project to build artificial intelligence data centers, which is a partnership among <\/span>OpenAI<\/span><\/a>, <\/span>SoftBank<\/span><\/a>, Oracle and <\/span>MGX<\/span><\/a>, plus technical alliances with other companies<\/span>, the analyst said<\/span>.<\/span><\/p>\n It also does not include <\/span>Apple<\/span><\/a>\u2019s own data center plans, which are ramping up over the next four years<\/span>, according to the research note<\/span>.<\/span><\/p>\n The surge in data center construction <\/span>is the result of<\/span> explosive growth in AI, cloud services and digital infrastructure needs. The demand for AI tools like <\/span>ChatGPT<\/span><\/a> is driving a need for massive computing power and storage, which means the necessity for more data centers.<\/span><\/p>\n Global <\/span>data center<\/span><\/a> capacity <\/span>is expected<\/span> to grow at 15% per year until 2027, which is forecast <\/span>to be<\/span> insufficient to meet growing demand, according to real estate services company <\/span>JLL<\/span><\/a>.<\/span><\/p>\n Driven by AI advancements, \u201cglobal data center construction currently stands at record levels,\u201d JLL said in its <\/span>2025 Global Data Center Outlook<\/span><\/a>. \u201cAll signals suggest that AI demand will continue to build momentum in 2025.\u201d<\/span><\/p>\n However, the experience of China is a cautionary tale.<\/span><\/p>\n After ChatGPT burst onto the scene in November 2022, there was a rush of data center buildout in China as growing demand for AI made the country seem like a sound bet, MIT Technology Review <\/span>reported<\/span><\/a> in March.<\/span><\/p>\n In 2023 and 2024, more than 500 new data center projects <\/span>were announced<\/span> in China. <\/span>At least 150 were operational by the end of last year<\/span>, per the report<\/span>.<\/span><\/p>\n But<\/span> the rise of <\/span>DeepSeek<\/span><\/a>, which offered a more economical way to train and use AI models, along with faltering economics around AI, is putting a crimp on the industry, according to the report.<\/span><\/p>\n Many data centers also were constructed hastily and did not meet industry standards. The result is that most of the companies running these data centers are \u201cstruggling to stay afloat,\u201d the report said.<\/span><\/p>\n For all PYMNTS AI coverage, subscribe to the daily <\/em>AI Newsletter<\/em><\/a>.<\/em><\/p>\n Highlights AWS and Microsoft are pausing or slowing down the signing of leases for data centers, according to a Wells Fargo research note shared with PYMNTS. Microsoft said it remains on track to spend its 2025 budget of $80 billion or more for data centers but admitted to \u201cslowing or pausing\u201d early-stage projects based on […]<\/p>\n","protected":false},"author":2,"featured_media":390141,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[188,183,185,186,187,184,189,150,182,190],"class_list":["post-390138","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology","tag-blockchain-tech","tag-blockchain-technology","tag-crypto-technology","tag-cryptocurrency-technology","tag-metaverse-technology","tag-nft-technology","tag-soul-bound-token","tag-tech","tag-technology","tag-token-technology"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/390138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=390138"}],"version-history":[{"count":1,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/390138\/revisions"}],"predecessor-version":[{"id":390142,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/390138\/revisions\/390142"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/390141"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=390138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=390138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=390138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n Highlights <\/span>\n <\/p>\nOther Hyperscalers Remain Active<\/span><\/strong><\/h2>\n