Microsoft has announced that it is “slowing or pausing” some of its data centre construction, including a significant $1 billion project in Ohio. This decision represents a notable shift in the demand for artificial intelligence technology, which previously drove a massive expansion of infrastructure.
The tech giant confirmed that it would halt early-stage projects on rural land it owns in Licking County, central Ohio, reserving two of the three planned sites for farmland.
Noelle Walsh, president of Microsoft’s cloud computing operations, stated, “In recent years, demand for our cloud and AI services grew more than we could have ever anticipated and to meet this opportunity, we began executing the largest and most ambitious infrastructure scaling project in our history.”
Walsh also mentioned that “any significant new endeavor at this size and scale requires agility and refinement as we learn and grow with our customers. What this means is that we are slowing or pausing some early-stage projects.”
While Microsoft did not disclose other projects that have been slowed, it did reveal that in December it paused later phases of a large data centre project in Wisconsin. Analysts have suggested that scaling back might also be related to Microsoft’s partnership with OpenAI, the maker of ChatGPT.
Craig Ellis, director of research at B. Riley Securities, noted, “OpenAI was moving in one direction by prioritizing advanced AI systems, while Microsoft may not have been moving that same direction.” In January, the companies altered their agreement allowing OpenAI to develop some of its own computing capacity.
Amidst these changes, Microsoft has committed to investing over $80 billion globally in AI infrastructure for the fiscal year ending in June, and it has doubled its data centre capacity over the last three years. However, the pause in Ohio has disappointed local officials, as the county had hoped to attract technology investments amid growing competition from companies like Google and Meta.
