- An Amazon VP says the company is still seeing strong demand for data centers.
- A Wells Fargo report suggested AWS was pausing some data center leasing discussions.
- Another February analyst note said Microsoft was stepping back from some data center lease negotiations.
An Amazon executive has fired back at an analyst note suggesting the company is pausing its data center expansion plans.
Kevin Miller, a vice president of global data centers at Amazon Web Services, said in a Monday LinkedIn post that there is still "strong demand" for the company to deliver access to infrastructure at the heart of the AI boom.
Earlier on Monday, Wells Fargo published a research note that said its analysts had "heard from several industry sources" that AWS had paused some of its data center leasing discussions.
The analysts said those discussions had been on the "colocation side," a strategy in which a hyperscaler like AWS rents space in a third-party data center.
The note, titled "Data Centers: AWS Goes on Pause," said that "it's not clear yet whether AWS slowing some leases is an area of concern."
The analysts explained that there can sometimes be a "digestion" period lasting six to 12 months in which leasing activity slows before picking up again.
Miller said in his LinkedIn post that AWS has learned to "consider multiple options in parallel" following almost two decades of delivering data center capacity.
"Some options might end up costing too much, while others might not deliver when we need the capacity," Miller said. "Other times, we find that we need more capacity in one location and less in another."
While Miller referred to this as "routine capacity management," the report is likely to have sparked concern among investors who have looked at data center demand as a signal of how much momentum there is for AI services.
Data centers have become an increasingly important asset in the generative AI boom, as companies like AWS have used them to host servers loaded with chips that can train and host the models that lead the industry today.
Earlier this year, Big Tech companies showed they were all in on the AI boom by collectively lining up over $300 billion in AI infrastructure spend.
But in February, Microsoft's shares fell 1.3% after a report from an analyst at TD Cowen said the company was stepping back from negotiations on leases for data centers in multiple markets.
An Amazon spokesperson referred BI to Miller's LinkedIn post.
