Overview

• 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.