Bloomberg reports that Microsoft has paused or cancelled projects in Chicago and London over concerns it may be expanding too rapidly, while developments in Jakarta and Mount Pleasant, Wisconsin, are said to be facing construction setbacks.
The company has poured hundreds of billions into expanding its digital infrastructure to power its cloud services and support OpenAI, but it's now re-evaluating that growth amid oversupply concerns and as its key AI partner starts forging ties with rivals like Oracle.
Reports surfaced in February that Microsoft had cancelled multiple data centre leases across the US, with analysts at TD Cowen suggesting the firm was in an oversupply position and sought to use power and facility delays as a justification for terminating agreements.
In late March, more data centre projects were reportedly cancelled by the tech giant, with leases in Europe also cut — just days after Alibaba Group chair Joe Tsai warned of a data centre investment bubble.
The latest reported cancellation affects a facility in the Greater Jawa Barat region, part of Microsoft’s $1.7 billion investment in Indonesia’s cloud and AI infrastructure.
Reports suggest that Microsoft’s project has suffered from issues with construction resources and power availability. Despite the delays, the Indonesia Central cloud region is still expected to go live in Q2 2025.
Other proposed sites reportedly facing the axe are between London and Cambridge as Microsoft looks to take advantage of the UK government’s proposed Oxford-Cambridge Growth Corridor, which would link the two university cities to create “Europe’s Silicon Valley”.
Grid constraints have reportedly hampered Microsoft’s projects, with similar issues impacting planned sites in Wales and Northern England.
In total, Microsoft had planned to invest $80 billion in AI data centres in 2025, with half of that earmarked for the US.
“Our data centre capacity needs years in advance to ensure we have sufficient infrastructure in the right places,” a Microsoft spokesperson told Bloomberg.
“As AI demand continues to grow, and our data centre presence continues to expand, the changes we have made demonstrates the flexibility of our strategy.”
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