Microsoft Cancels AI Data Center Leases - Tech News

Microsoft Reduces Data Center Commitments

Reports indicate that Microsoft is currently reducing the scale of its data center infrastructure.

The technology leader has reportedly terminated lease agreements with several data center operators, amounting to a combined capacity of approximately “a couple hundred megawatts.”

According to a memo from TD Cowen, as reported by Bloomberg, this capacity is comparable to the output of roughly two full-scale data centers.

Reasons for the Reduction

The precise motivations behind Microsoft’s decision remain unspecified. However, the move prompts speculation regarding a potential recalibration of the company’s forecasts for future demand related to artificial intelligence.

This action stands in contrast to the prevailing trend observed within the broader technology sector.

Industry Trends: Expansion Despite Microsoft's Move

Early in January, Donald Trump, the incoming president, unveiled a $20 billion initiative to fund data center development. This project is spearheaded by Hussain Sajwani, a prominent Emirati businessman.

Furthermore, later in January, OpenAI, Oracle, and SoftBank jointly announced Stargate, a substantial undertaking designed to allocate up to $500 billion towards the construction of data centers specifically for OpenAI’s use.

Seeking Clarification

TechCrunch has contacted Microsoft to request further details and clarification regarding this development.

A response is currently awaited.