Microsoft denies AI slowdown as it scales back datacentre investment
Tech giant says it’s focusing on optimising efficiencies rather than scaling back
Microsoft has dismissed concerns over a potential slowdown in its cloud infrastructure growth, despite reports that it has cancelled multiple datacentre projects in the US and Europe.
Responding to claims of a strategic pullback, a Microsoft spokesperson emphasised that the company remains committed to expanding its cloud infrastructure at a “record pace”, with plans to invest over $80 billion in new projects this financial year.
Speaking to Windows Centralthe spokesperson said: “Thanks to the significant investments we have made up to this point, we are well positioned to meet our current and increasing customer demand. Last year alone, we added more capacity than any prior year in history.
“While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions.”
The comments follow a report from Bloomberg in February, which cited a memo from investment bank TD Cowen claiming that Microsoft has scaled back datacentre leases amounting to "a couple hundred megawatts." Given that a typical hyperscale Azure facility consumes roughly 100 megawatts, this suggests at least two major datacentres have been affected.
Bloomberg attributed the move to concerns over oversupply, implying that Microsoft may be reassessing its datacentre footprint amid shifting market conditions. The decision is particularly notable given Microsoft's deep investment in AI, including its partnership with OpenAI and the increasing demands of cloud-based services such as Xbox Cloud Gaming, OneDrive and Outlook.
However, Microsoft's firm stance suggests the tech giant is focusing on optimising efficiencies rather than simply scaling back. Competition in AI infrastructure is intensifying, with recent advancements from China’s DeepSeek AI model, which reportedly offers improved efficiency over OpenAI’s models.
Microsoft’s adjustments also come at a time when US policymakers, including president Donald Trump, are advocating for increased investment in domestic AI infrastructure, with figures of up to half a trillion dollars being discussed.