According to CNBC, a Wells Fargo analyst note claims Amazon is rethinking a number of colocation deals, with sources suggesting the delays mirror Microsoft’s recent infrastructure rethink.
While specific projects weren’t named, the note pointed to a particular impact on international sites, though deals weren’t being cancelled outright.
AWS is expanding its data centre footprint at a breakneck pace, driven by surging demand for cloud services and the rapid rise of AI workloads.
In the first half of 2024 alone, the hyperscaler pledged over $50 billion towards US infrastructure projects and rolled out new cloud regions across Taiwan, Japan, and Singapore.
But despite the momentum, supply chain constraints are putting the brakes on growth. In February, Amazon CEO Andy Jassy warned that shortages of chips, power capacity, and motherboards were complicating efforts to scale at speed.
In March, AWS’s director of infrastructure policy for EMEA cautioned that outdated grid infrastructure was slowing the launch of new data centre projects.
Wells Fargo analysts believe Amazon is now using supply chain challenges as a strategic lever to pause or delay several developments — a tactic Microsoft has already employed to notable effect.
Microsoft initially halted a number of US-based projects before extending delays to sites in the UK, Europe, Indonesia, and Australia.
After reports of the pauses surfaced, Microsoft’s president of cloud operations, Noelle Walsh, offered context, stressing that the company remains committed to growth.
“In recent years, demand for our cloud and AI services grew more than we could have ever anticipated, and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history,” Walsh wrote in a LinkedIn post. “By nature, any significant new endeavour at this size and scale requires agility and refinement as we learn and grow with our customers.
“While we may strategically pace our plans, we will continue to grow strongly and allocate investments that stay aligned with business priorities and customer demand.”
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