Microsoft reportedly pulls back on its data center plans

Microsoft has pulled back on data center projects around the world, Bloomberg reports, suggesting that the company is wary of expanding its cloud computing infrastructure too rapidly.

Microsoft has halted talks for or delayed development sites of data centers in the U.K., Australia, North Dakota, Wisconsin, and Illinois, per Bloomberg. A spokesperson told the publication that Microsoft makes its plans years in advance and that the changes demonstrate “the flexibility of [its] strategy.”

As recently as February, Microsoft reiterated earlier plans to allocate more than $80 billion of its cash to capital expenditures in 2025, primarily AI data centers. As Bloomberg points out in its piece, it’s hard to know how much of the company’s recent pullback reflects its expectations of diminished demand versus temporary construction challenges, such as shortages of power and building materials.

Microsoft previously said that it would shift its data center expansion focus for 2025 from new construction to fitting existing facilities with servers and other computing equipment.