Microsoft shelves AI data-center deals in sign of potential oversupply, analyst says

Microsoft has scrapped leases for sizeable data center capacity in the U.S., suggesting a potential oversupply at the tech giant as it builds out artificial intelligence infrastructure to meet a potential demand surge, TD Cowen analysts said. Skepticism has been growing among investors over the billions of dollars U.S. tech firms have been channeling into AI infrastructure due to slow payoffs and breakthroughs at Chinese startup DeepSeek, which has showcased AI tech on par with or even better than its Western rivals at a fraction of the cost. Redmond, Washington-based Microsoft has canceled leases totaling "a couple of hundred megawatts" of capacity with at least two private data-center operators, the analysts led by Michael Elias said, citing supply chain checks.