Microsoft Cancels U.S. Data Center Leases Amid AI Shift

Microsoft has canceled significant data center leases in the U.S., reportedly totaling a few hundred megawatts, indicating potential overcapacity in their AI infrastructure investments. Analysts from TD Cowen suggest the move could be due to Microsoft reallocating resources domestically or a strategic shift influenced by their partnership with Oracle on the AI project Stargate. The cancellations have raised concerns about the company's confidence in AI demand and its long-term strategy. Despite this, Microsoft maintains its plan to spend $80 billion on AI data centers this fiscal year. The decision comes amid wider industry concerns following the launch of DeepSeek's cost-effective AI model, which has challenged U.S. tech giants' AI spending strategies. Microsoft's stock showed a slight decline following these developments.