Microsoft AI Data Center Project Halted! TD Cowen and Cai Chongxin Warn Together: AI Infrastructure Supply Exceeds Demand

Microsoft (Microsoft) has gradually withdrawn and postponed its AI large data center projects in Europe and the United States over the past six months. International investment bank TD Cowen speculates that the underlying reasons include not only resource reallocation but also a warning of "oversupply." After the news broke, it immediately triggered market turmoil, causing tech stocks such as Nvidia (Nvidia), Meta, and Alphabet to fall simultaneously.

TD Cowen exposed that Microsoft canceled the 2GW grade data center project.

According to Bloomberg, TD Cowen pointed out that Microsoft has gradually exited new data center projects in Europe and the United States with a total capacity of about 2GW over the past six months. These facilities were originally planned to support the explosive demand for AI computing, but now, due to the market potentially being "over-supplied," Microsoft has decided to hit the brakes.

As early as February of this year, TD Cowen pointed out that Microsoft had canceled some land leases in the United States, which attracted market attention at the time. Now, new reports of cancellations and delays in construction projects have emerged, indicating that Microsoft has begun to adjust its layout.

Microsoft stated that there are rhythmic adjustments, with funds shifting towards internal upgrades and equipment deployment.

In response, a Microsoft spokesperson stated that the company actually set a record for the largest increase in data center capacity in history last year, and is now making strategic adjustments in certain regions, while emphasizing that "it will continue to grow in all regions."

Microsoft expects to invest about $80 billion in building AI data centers this fiscal year ending June (, but the expansion may slow in the next fiscal year, shifting funds towards internal upgrades and equipment deployment.

Microsoft abandons part of its cloud business with OpenAI, while other players seize the opportunity to fill the gap.

This wave of delays not only cancels construction projects but also includes a shift in the collaboration model with OpenAI. Although Microsoft has invested approximately $13 billion to support OpenAI, the two parties modified their agreement earlier this year, allowing OpenAI to use resources from other cloud service providers, as long as Microsoft chooses not to take this deal.

This also means that Microsoft does not intend to "fully absorb" all the needs of OpenAI, but rather chooses to strategically allocate resources and focus their efforts on projects they consider more valuable.

Google and Meta take advantage of the situation, seizing the rental space left vacant in Europe.

The TD Cowen report also pointed out that some leases that Microsoft canceled in Europe have been picked up by Google and Meta. However, this also reflects that the market is being reshuffled; not every company is rushing to expand madly, but rather making choices based on their own needs.

Tech stocks fell in response, as the market is concerned about oversupply.

With the exposure of this report, technology stocks also fell:

Microsoft: fall 1.31%

Meta: fall 2.45 %

Alphabet: fall 3.27 %

Nvidia ): fall 5.74 %

Alibaba Chairman Joe Tsai ( also pointed out that the construction of AI data centers may become inflated, and future supply may greatly exceed the actual demand for AI services.

Lease cancellation or warning of data center oversupply

The TD Cowen team finally emphasized that Microsoft's recent cancellation of leases and delayed expansions send a very clear signal, indicating that the current supply of data centers in the market has exceeded the actual short-term demand for AI computing, warning investors to be cautious of bubble risks.

)AI Data Center Investment Risk of Bubble? Alibaba's Joe Tsai: US-China Investment Speed Outpaces Demand (

This article reports that Microsoft's AI data center construction project is on hold! TD Cowen and Alisa Tsai jointly warn: AI infrastructure is in oversupply, first appearing in Chain News ABMedia.