Microsoft, once at the forefront of the AI growth surge driven by its partnership with OpenAI, has announced a strategic slowdown in its AI infrastructure expansion. This shift is notable, as the tech industry has been vigorously expanding to meet rising AI demands since late 2022. Noelle Walsh, head of Microsoft Cloud Operations, indicated that unforeseen demand had prompted ambitious scaling plans and acknowledged the need for agility, leading to a pause or slowdown in some early-stage projects. Analysts note that Microsoft has walked away from significant AI cloud capacity and canceled data center leases in both the US and Europe.
In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history.
What this means is that we are slowing or pausing some early-stage projects.
Microsoft has walked away from more than 2 gigawatts of AI cloud capacity in both the US and Europe in the last six months.
The tech giant has also deferred and canceled existing data center leases in the US and Europe.
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