Microsoft has halted several data centers in Europe and the US due to oversupply.
Microsoft has canceled data center projects with a capacity of 2 gigawatts in the US and Europe over the past six months, according to analysts at TD Cowen. The halt is due to oversupply and low demand forecasts, reports Reuters.
Strategic Decision
This decision is largely because Microsoft does not want to assist in training OpenAI’s new workloads. Competitors like Google and Meta are now taking up the freed capacity. Google is doing this mainly outside the US, while Meta is setting up data centers in its home country.
Microsoft still plans to invest $80 billion in AI but is ‘strategically adjusting’ its infrastructure per region. Since the arrival of DeepSeek, the large expenditures of American tech companies on AI have been strongly questioned by investors. These companies argue that investments are necessary to remain competitive.
Google and Meta also continue to invest in AI, with planned expenditures of $75 and $65 billion respectively for AI development this year.