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Investing.com -- Microsoft (NASDAQ:MSFT) has scaled back or delayed a series of data center projects globally, signaling a more measured approach to building the infrastructure that powers its AI and cloud services, according to a Bloomberg report.
The company has recently halted negotiations or paused development in multiple locations, including Indonesia, the UK, Australia, Illinois, North Dakota, and Wisconsin, Bloomberg said, citing people familiar with the matter.
While Microsoft is seen as a frontrunner in commercializing artificial intelligence—largely through its partnership with OpenAI—the company’s infrastructure spending plans are closely watched by investors as an indicator of long-term demand.
The recent pullback has raised questions about whether Microsoft is adjusting to short-term construction bottlenecks or reassessing demand projections for AI services.
Some investors view the slowdown as a warning that expected customer spending may not justify the company’s current level of investment in server farms. That sentiment has added pressure to tech stocks with exposure to AI infrastructure.
Microsoft shares are down over 9% this year.
The tech behemoth acknowledged that it has revised some of its data center planning, without offering specifics.
“We plan our data center capacity needs years in advance to ensure we have sufficient infrastructure in the right places,” a spokesperson said.
“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.”
In the UK, Microsoft exited negotiations for a site between London and Cambridge that was being marketed for advanced Nvidia (NASDAQ:NVDA) chip deployments.
In the U.S., it pulled out of a deal for space near Chicago and put on hold some expansion at its Mount Pleasant, Wisconsin campus, which had previously drawn political attention.
The company also paused construction at a site near Jakarta and took a slower approach to talks with Applied Digital over a facility in North Dakota. Per Bloomberg, delays there eventually led to the expiration of an exclusivity clause.
Microsoft has also stepped back from a proposal to lease additional cloud capacity from CoreWeave (NASDAQ:CRWV), though the supplier has since secured another buyer.
In London, Microsoft was in talks to lease space at Ada Infrastructure’s 210-megawatt Docklands facility but has yet to commit to the project, the report said. The site is now being offered to other prospective tenants.