Hyperscalers will be in a tough spot

By Amelia Repke

High tariffs implemented by Washington is backfiring, specifically in the development of US hyperscalers.

Hyperscalers are cloud service providers which are well-known for their abilities to perform ultra large scale computing, which is a data processing method that allows software architecture to grow elastically as system requirements increase.

Hypersclaers can provide cloud computing and data management services to enterprises that require massive infrastructure for large-scale data processing and storage. Although there is no unified standard for defining Hyperscaler, mainstream cloud providers such as Amazon Web Services, Google Cloud, Microsoft Azure, IBM Cloud, and Alibaba Cloud all meet this description.

Right now the rapid development of hyperscalers will facing significant headwinds, which are high tariffs implemented by Washington. AI infrastructure projects build by Tech giants which invest heavily in the US may face backlash.

ARelated data shows that electronic products are the second largest category of imported goods in the US last year, including smartphones, pcs and data center equipment, with a total market value of nearly $486 billion. Analysts from Bernstein Research estimate that the import value of data processing equipment in the US is approximately $200 billion last year. Multiple analysts believe that the new tariff will pose a threat to Hyperscalers such as Microsoft, Amazon as well as Alphabet, the parent company of Google.

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