First, Microsoft tapped the AI data center brakes. Now analysts are worried about Amazon.

Core Viewpoint - Amazon is showing signs of slowing down its aggressive expansion in AI data centers, raising concerns among analysts about its future momentum in the data center market [1][2][10]. Group 1: Analyst Concerns - Analysts from Wells Fargo noted that Amazon Web Services (AWS) has paused discussions on certain new colocation data center deals, particularly international ones, although the scale of this pause is unclear [2][13]. - TD Cowen analysts reported a pullback in US colocation deals from Amazon, indicating that the company has walked away from select deals and expansion options [4][5]. - There is a broader moderation in the urgency and speed with which cloud companies, including AWS, are seeking to secure data center capacity, with fewer large deals in the market [12][19]. Group 2: Market Dynamics - The data center market is experiencing a cooling phase compared to the heightened activity seen in previous years, with signs of moderation in hyperscale demand [8][12]. - AWS's recent cautious moves may be part of a strategy to increase efficiency across its data center operations, as the company typically prefers building its own data centers rather than engaging in colocation deals [18][19]. - Historical patterns suggest that digestion periods, characterized by slowing new leases, can last 6 to 12 months before a rebound occurs [17]. Group 3: Company Response - In response to concerns, AWS's vice president Kevin Miller stated that the company continues to see strong demand for generative AI and foundational workloads, emphasizing routine capacity management [14][15][16]. - Miller's comments aim to frame the current pause not as a negative sign but as a normal part of data center growth dynamics [17].