The report also noted that European energy stocks dropped following the news, as it implies reduced power needs for data centers. Critics have pointed out the lack of practical applications for AI, even as major tech companies invest heavily in AI infrastructure. TD Cowen analysts suggest that Microsoft's actions may be due to an oversupply situation. Additionally, Microsoft's partnership with OpenAI might be evolving, potentially altering its investment needs.
Key takeaways:
- Microsoft Corp. is canceling leases for a substantial amount of datacenter capacity in the US, possibly due to concerns about overbuilding AI computing resources.
- TD Cowen reports that Microsoft has voided leases totaling "a couple of hundred megawatts" and has stopped converting agreements that usually lead to formal leases.
- Microsoft is redirecting some of its planned international spending to the US, indicating a potential slowdown in international leasing.
- European stocks tied to the energy sector dropped on the report, suggesting that big tech companies may need less power for their data centers.