Microsoft Reassesses AI Infrastructure, Halts 2GW of Data Center Projects

The company cites oversupply and reduced OpenAI workload demands but maintains its $80 billion AI infrastructure investment for fiscal year 2025.

Microsoft has canceled or deferred data center projects totaling 2 gigawatts in the US and Europe over the past six months due to oversupply and shifting demand forecasts.
The decision aligns with reduced infrastructure needs following changes to Microsoft's $13 billion partnership with OpenAI, which now allows OpenAI to use other cloud providers.
Competitors Alphabet and Meta have absorbed some of the abandoned data center capacity, with Google expanding internationally and Meta focusing on the US.
Microsoft is retrofitting existing data centers to support advanced AI hardware, including liquid cooling systems for high-performance GPUs.
Despite these adjustments, Microsoft remains committed to its $80 billion AI infrastructure investment for fiscal year 2025, balancing long-term ambitions with immediate market realities.