Microsoft Slows AI Data Centre Expansion, Pauses USD 1 Billion Ohio Project
- tech360.tv
- 3 days ago
- 2 min read
Microsoft is slowing or pausing several artificial intelligence data centre projects, including a USD 1 billion development in Ohio, amid shifting infrastructure needs and evolving business priorities.
The company confirmed it is halting early-stage construction on rural land in Licking County, Ohio, where it owns three sites. Two of those sites will now be reserved for farmland.
Noelle Walsh, President of Microsoft’s cloud operations, said the company is adjusting its infrastructure plans to align with customer demand and business strategy.
“In recent years, demand for our cloud and AI services grew more than we could have ever anticipated,” Walsh said in a LinkedIn post. “We are slowing or pausing some early-stage projects.”
Microsoft did not specify which other projects are affected, but in December it paused later phases of a large data centre in Wisconsin.
Analysts at TD Cowen also reported that Microsoft has scaled back international expansion and cancelled some U.S. leases for third-party data centres.
Some analysts have linked the changes to Microsoft’s evolving relationship with OpenAI, the maker of ChatGPT.
Craig Ellis, Director of Research at B. Riley Securities, said OpenAI is prioritising development of more advanced AI systems, while Microsoft may be taking a different approach.
On Jan. 21, Microsoft and OpenAI revised their agreement, ending Microsoft’s exclusive role as OpenAI’s computing provider. OpenAI will now build its own infrastructure, mainly for research and model training.
That same day, former President Donald Trump promoted a USD 500 billion AI infrastructure pledge involving OpenAI, Oracle and SoftBank, starting with a Texas data centre.
Microsoft has long invested in global data centres to support its cloud services. The recent AI boom increased demand for such facilities, which require significant computing power and electricity.
Trump cited AI’s energy needs this week in his call to revive the U.S. coal industry. Tech firms are also exploring nuclear energy, including a Microsoft-backed plan to restart the Three Mile Island plant in Pennsylvania.
That plant would supply power to data centres in Ohio and Virginia, the largest data centre hub in the U.S.
Despite the Ohio pause, Microsoft said it still plans to invest more than USD 80 billion globally in AI infrastructure this fiscal year, ending in June.
The company has already doubled its data centre capacity over the past three years.
Walsh said Microsoft will continue to grow and invest strategically based on business priorities and customer needs.
The decision to pause the Ohio project disappointed local officials.
Licking County has also attracted data centre investments from Google and Meta Platforms, as well as a semiconductor factory from Intel.
Intel, however, delayed the first phase of its factory to 2030 due to ongoing challenges.
Microsoft pauses USD 1 billion AI data centre project in Ohio
Company adjusts infrastructure plans amid changing AI demands
Revised agreement ends Microsoft’s exclusive role with OpenAI
Source: AP NEWS