Microsoft Pulls Back on Data Centers From Chicago To Jakarta 21
Microsoft has pulled back on data center projects around the world, suggesting the company is taking a harder look at its plans to build the server farms powering artificial intelligence and the cloud. From a report: The software company has recently halted talks for, or delayed development of, sites in Indonesia, the UK, Australia, Illinois, North Dakota and Wisconsin, according to people familiar with the situation. Microsoft is widely seen as a leader in commercializing AI services, largely thanks to its close partnership with OpenAI. Investors closely track Microsoft's spending plans to get a sense of long-term customer demand for cloud and AI services.
It's hard to know how much of the company's data center pullback reflects expectations of diminished demand versus temporary construction challenges, such as shortages of power and building materials. Some investors have interpreted signs of retrenchment as an indication that projected purchases of AI services don't justify Microsoft's massive outlays on server farms. Those concerns have weighed on global tech stocks in recent weeks, particularly chipmakers like Nvidia which suck up a significant share of data center budgets.
It's hard to know how much of the company's data center pullback reflects expectations of diminished demand versus temporary construction challenges, such as shortages of power and building materials. Some investors have interpreted signs of retrenchment as an indication that projected purchases of AI services don't justify Microsoft's massive outlays on server farms. Those concerns have weighed on global tech stocks in recent weeks, particularly chipmakers like Nvidia which suck up a significant share of data center budgets.
When a recession is expected, companies pull back (Score:4, Insightful)
With the latest tariff announcements, every business is now preparing for a recession or worse. That means, projects planned due to expected growth are put on hold or cancelled.
Re:When a recession is expected, companies pull ba (Score:4, Insightful)
I wish I could argue the AI bubble is about to pop. But you're probably right, it's just the beginnings of Trump fallout instead.
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I wish I could argue the AI bubble is about to pop. But you're probably right, it's just the beginnings of Trump fallout instead.
If both slam into us at the same time, it could be a fun couple years watching all our financial systems melt into a puddle of goo.
Re: It's not a recession. It's AI. (Score:5, Funny)
Just look at what AI has done to every industry from bicycles to building homes. It's not just the tech sector. All industries are seeing layoffs as these jobs are replaced by AI.
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Really?
I've not heard of or seen any mass layoffs attributed to AI in any industry...even tech so far....
How the hell is AI causing interruptions in the bicycle and home building industries?
Re: It's not a recession. It's AI. (Score:2)
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This move by Microsoft was telegraphed about a month ago at least. My guess is that infrastructure costs are causing a bit of a reset, especially after Deepseek. They usually think longer-term than a recession, although setting contract terms before the recession hits is nice to avoid.
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The people at Microsoft have known it would happen, but predicting WHEN has been the problem.
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This move by Microsoft was telegraphed about a month ago at least. My guess is that infrastructure costs are causing a bit of a reset, especially after Deepseek. They usually think longer-term than a recession, although setting contract terms before the recession hits is nice to avoid.
The last time there was a story about Microsoft pulling out of European data centers, Microsoft reaffirmed its $80 billion data center expenditures. Microsoft has stuck with the $80 billion number. Of course, the real story will be if and how much the $80 billion decreases in the future. The $80 billion is for the 12 months ending in June. Microsoft is expected to dial back on spending in the future, but we don't know by how much and if that is due more to changing AI strategy or the impending global re
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Plus now that the US has proven it can't be trusted at best and at worst is an adversary to what used to be our allies, data residency requirements are going to force cloud providers and others to build more facilities outside of the US. So that means more investment leaving our country.
China's DeepSeek Efficiency? (Score:2)
I wonder if they took at look at how efficient China's DeepSeek training is, and are maybe reevaluating their hardware requirements going forward?
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Re: China's DeepSeek Efficiency? (Score:2)
This has been a while coming. As a shareholder of MSFT, I follow their press releases pretty closely. What I've seen is about a year of pulling back from their OpenAI investment and making moves to monetize an overcapacity of servers.
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This. If not DeepSeek them something else that will not exactly be the OpenAI/Nvidia duopoly. There is going to be a 'good-enough' version of AI that will work for agents, chatbots, summarizing stuff, cheating on exams...and its not clear how much people will pay. Lots of people will also just keep hitting '0' to speak to a person.
I would also say that I think the AGI ...if/when is fully realized will not be the absolute game-changer some people hope. If you use an AGI to design an automobile, it
Hence the crackdowns on Windows 11 (Score:2)
Satya's words put into action (Score:3)
Have to see if this affects capital spending (Score:2)
In just about every news story about Microsoft pulling back on data centers, the $80 billion in data center and AI spending in 2025 is reaffirmed. It's the $80 billion that is important. If Microsoft walks back on that number, then we'll know there's a shift in strategy.
AI not all it is cracked up to be? (Score:2)
Well, MS absolutely sucks at making good tech, but they do really know how to make business. If they pull out, the house of cards that the LLM hype is will not last much longer.
If you need to buy your own nuclear power plant (Score:1)