Microsoft Raises Prices And Scales Back Data Centers.

Just a day after Alibaba Group raised concerns about a potential AI bubble, Microsoft is reevaluating its AI infrastructure expansion. The company has decided to scale back its data center buildout in the U.S. and Europe, canceling projects that would have consumed approximately 2 gigawatts of electricity, according to analysts at TD Cowen.

Despite this adjustment, Microsoft remains committed to AI, with plans to invest $80 billion in the sector this year. However, signs of a strategic shift began to surface in February when the company withdrew from several U.S. datacenter leases and modified aspects of its partnership with OpenAI.

Microsoft is not alone in navigating investor concerns over AI expenditures. Meta is set to invest $65 billion in AI this year, while Alphabet has earmarked $75 billion for the technology. Notably, both companies have moved to acquire some of the datacenter leases that Microsoft vacated, TD Cowen reports.

While some tech giants are refining their AI investment strategies, others continue to forge ahead. This evolving landscape may create uncertainty for investors, but the sector remains dynamic, with significant capital still flowing into AI development.