Microsoft slows data center expansion as it relooks AI plans

Microsoft is pausing or delaying data center projects in several US states, including Illinois and Wisconsin, as well as in the UK, Australia, and Indonesia.

The pullback signals a reassessment of AI and cloud infrastructure spending.

Microsoft still plans to invest $80 billion in data centers this year but will slow new construction, focusing on upgrading existing sites for Azure, its cloud platform.

Analysts believe the company is adjusting its spending.

Some investors worry AI demand may not justify the spending, especially as OpenAI partners with Oracle and SoftBank, which could reduce its reliance on Microsoft Azure for cloud services.

Microsoft’s shares are down 9% so far in 2025.