Microsoft stops the development of AI Data Centers in Europe

Microsoft has recently scaled back its data center leasing activities in the U.S. and Europe, a move attributed to an oversupply of computing capacity relative to its current demand forecasts. Just last year, the Redmond-based tech giant announced plans to build dozens of European data centers.

According to the latest reports, analysts from TD Cowen revealed that the company has abandoned projects that would have utilized 2 gigawatts of electricity over the past six months.

This decision also reflects Microsoft’s choice to limit additional AI training workloads from OpenAI, the creator of ChatGPT.

Despite these adjustments, Microsoft remains committed to its AI infrastructure plans, and its $80 billion fiscal year investment is still on track.

The company emphasized that it may strategically pace its infrastructure expansion but continues to grow in all regions. Meanwhile, competitors like Alphabet (Google) and Meta have stepped in to fill the capacity gap left by Microsoft’s pullback.

This development comes amid growing investor skepticism about the high costs of AI investments, especially as emerging competitors like China’s DeepSeek offer AI solutions at significantly lower costs.