Microsoft Shelves AI Data-Center Deals as Sign of Potential Oversupply
Microsoft has scrapped leases for sizeable data center capacity in the U.S., suggesting a potential oversupply at the tech giant as it builds out artificial intelligence infrastructure to meet a possible surge in demand. The company's cautious approach to leasing capacity comes amid growing skepticism among investors over the billions of dollars U.S. tech firms have been channeling into AI infrastructure due to slow payoffs and breakthroughs at Chinese startup DeepSeek. Microsoft's decision may also be seen as a strategic move to pace its infrastructure investments, following similar actions by other tech firms such as Meta Platforms.
- The cancellation of these leases could signal that the industry has overestimated demand for cloud and AI services, potentially leading to a correction in spending habits among major tech players.
- How will Microsoft's decision impact its ability to compete with Chinese startups like DeepSeek, which have already demonstrated significant advancements in AI technology at a fraction of the cost?