The intelligence gathered from the financial analysts at TD Cowen indicates that Microsoft has scrapped plans to lease space for building some data centers in the United States. This decision stems from concerns that the company may overinvest in data centers to support AI more than necessary in the long run.
The electricity capacity for the canceled data center is estimated to be in the range of several hundred megawatts, roughly equivalent to the size of two data centers. TD Cowen confirmed the information with relevant suppliers who were notified about the project cancellation.
Representatives from Microsoft clarified that the company still aims to invest according to its budget for the fiscal year ending in June but declined to comment on this report.
However, the reason behind Microsoft retracting plans for some data centers might not be solely attributed to DeepSeek, leading to worries that the processing resource demand may not be as high as anticipated. Part of the decision could be influenced by OpenAI’s intention to migrate processing operations from Microsoft’s Azure to Stargate, a facility jointly developed and set to be operational by 2023.
Source: Bloomberg
TLDR:
Microsoft cancels plans for certain data centers in the US, concerned about potential overinvestment in AI infrastructure. Speculation arises that diminished resource demand might be linked to OpenAI’s shift away from Microsoft’s Azure to their own facility, Stargate, set to launch in 2023.
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