TD Cowen analyst Michael Elias has explained to clients through multiple notes over the last month that Microsoft has scaled back on data center projects in the U.S. and Europe. This development is unsurprising, as readers have been aware of the emerging risks posed by the cheaper and more efficient Chinese DeepSeek (as noted on Jan. 27), prompting us to question whether AI data capacity will be achieved sooner than initially anticipated.
Another worrying sign for the AI bubble—or rather, a continuation of Elias' reporting on Microsoft scaling back data center projects—comes from Bloomberg, which provides additional color on MSFT supposedly halting data center construction sites in Indonesia, the UK, Australia, Illinois, North Dakota, and Wisconsin.
Here's more from the report, citing people familiar with talks (list courtesy of Bloomberg):
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Microsoft recently withdrew from negotiations to lease space between London and Cambridge in the UK at a site being marketed for its ability to host advanced Nvidia chips, according to people familiar with the talks, who requested anonymity to discuss a private matter.
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The company has also halted negotiations for data center space at a site near Chicago, according to a person familiar with the talks.
