Microsoft cancels 2 gigawatts’ worth of data centers, analysts say
Microsoft has walked away from 2 gigawatts’ worth of new data center projects in the US and Europe, according to a new research note from TD Cowen analysts.
Another report from the same analysts in February detailed lease cancellations for “a couple of hundred MW” in the US.
The latest note read:
“Microsoft has both (1) walked away from +2GW of capacity in both the U.S. and Europe in the last six months that was in process to be leased, and (2) has both deferred and canceled existing data center leases in both the U.S. and Europe in the last month.”
Microsoft has pledged $80 billion worth of capex on AI infrastructure this fiscal year.
The retreat might be related to the changes in Microsoft’s $13 billion partnership with OpenAI, which now allows for OpenAI to use other cloud computing platforms.
But recent developments such as DeepSeek’s performance and price breakthroughs have also raised questions about the industry’s rush to spend $315 billion on data centers this year.
The latest note read:
“Microsoft has both (1) walked away from +2GW of capacity in both the U.S. and Europe in the last six months that was in process to be leased, and (2) has both deferred and canceled existing data center leases in both the U.S. and Europe in the last month.”
Microsoft has pledged $80 billion worth of capex on AI infrastructure this fiscal year.
The retreat might be related to the changes in Microsoft’s $13 billion partnership with OpenAI, which now allows for OpenAI to use other cloud computing platforms.
But recent developments such as DeepSeek’s performance and price breakthroughs have also raised questions about the industry’s rush to spend $315 billion on data centers this year.
