Amazon Web Services Withdraws from Major Arizona Data Center Project December 5, 2025 In a significant shift for a major US data center development, Amazon Web Services (AWS) has reportedly backed out of plans to be the anchor tenant for the expansive 'Project Blue' campus in Tucson, Arizona. The move highlights the critical role infrastructure planning and local approvals play in the hyperscale data center market, where cooling solutions and power capacity are key determinants for multi-billion dollar investments. According to reports from local officials and media, AWS has decided against occupying the planned 290-acre campus in Pima County after a proposed change in the project's cooling technology. The development, led by Blue Owl-owned Beale Infrastructure, was initially designed to utilize liquid cooling but switched to an air-cooled system after the city of Tucson denied access to its reclaimed water supply. This change is understood to have been a decisive factor for the cloud giant. Local officials, including Pima County Supervisor Matt Heinz and Tucson City Councilman Paul Cunningham, confirmed they had received information from multiple sources about AWS's withdrawal. The scale of the abandoned project is substantial. Project Blue was envisioned as a campus comprising up to ten buildings, totaling approximately 2 million square feet (185,805 square meters) of data center space with a potential power capacity of 600 megawatts. Despite the high-profile exit, the developer, Beale Infrastructure, stated that AWS never had a formal agreement in place for the site. A company representative told local press, "Beale can only speak on behalf of our project, and not to the intention of other companies. Rather, it is up to any companies seeking to come into a market to announce that for themselves." The departure of AWS does not spell the end for Project Blue. Reports indicate that the developer is now in discussions with seven or eight potential alternative tenants. Notably, social media conglomerate Meta has been named as one of the companies expressing interest in the site. This development underscores the intense competition for suitable data center locations in North America and the fluid nature of pre-construction commitments in the sector. The incident also serves as a case study on the growing challenges of water usage for cooling in arid regions, potentially influencing future site selection strategies for hyperscalers focused on sustainable operations. Source: datacenterdynamics
Amazon Web Services Withdraws from Major Arizona Data Center Project
