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Microsoft (MSFT-1.77%) has reportedly stopped or delayed data center projects across the globe, possibly signaling a reassessment of its artificial intelligence ambitions.
The tech giant has pulled back on developing data center sites in countries such as Indonesia, Australia, and the U.K., as well as U.S. states including Illinois, North Dakota, and Wisconsin, Bloomberg reported, citing unnamed people familiar with the matter.
The company has also stepped back from negotiations to lease space in the U.K. between London and Cambridge that would’ve hosted Nvidia’s (NVDA-7.00%) chips, and another data center site near Chicago, Bloomberg reported.
The delays could also be tied to construction issues, such as at a site near Jakarta and one in Mount Pleasant, Wisconsin, Bloomberg reported.
A spokesperson for the company told Bloomberg that it plans “our data center capacity needs years in advance to ensure we have sufficient infrastructure in the right places.”
“As AI demand continues to grow, and our data center presence continues to expand, the changes we have made demonstrates the flexibility of our strategy,” the spokesperson said. Microsoft did not immediately respond to a request for comment from Quartz.
In February, analysts at TD Cowen (TD-1.65%) said in a note that Microsoft had canceled leases worth “a couple of hundred megawatts,” or approximately two data centers worth of capacity. In some cases, Microsoft said “facility/power delays” were a reason for termination, the analysts said in the note, adding that Meta (META-8.71%) had previously used a similar justification to cancel data center leases.
TD Cowen also noted that Microsoft “has pulled back on” converting statement of qualification agreements that typically turn into traditional leases. The analysts expressed uncertainty about whether Microsoft’s actions represent a temporary delay or a complete termination of the agreements.
Last week, the analysts said in another note that incremental channel checks showed that Microsoft had cancelled more data center leases in the U.S. and Europe since the initial note.
Microsoft told Bloomberg that it is sticking with its plans to invest $80 billion in AI-enabled data centers in fiscal year 2025, which ends on June 30.