Michaela
Financial research firm TD Cowen has released a brief report revealing that Microsoft has been canceling data center leases, suggesting the tech giant is grappling with an “oversupply” of capacity.
Bloomberg reports that the firm issued its quick take on February 21.
“Our channel checks indicate that [Microsoft] has 1) cancelled leases in the U.S. totalling ‘a couple of hundreds [megawatts]’ with at least two private data center operators, 2) has pulled back on the conversion of [statements of qualification] to leases, and 3) has re-allocated a considerable portion of its international spend to the U.S.,” the analysts commented.
TD Cowen’s recent channel checks reveal that Microsoft has canceled selected leases with at least two private data center operators in various U.S. regions, eliminating around a couple hundred megawatts of capacity. In several instances, the company has attributed these terminations to delays in facility readiness or power availability.
A Statement of Qualification (SOQ) typically precedes a lease, with almost all SOQs eventually turning into signed agreements. The firm pointed out that Microsoft’s decision to cancel these documents is unusual. This move may be a strategic negotiation tactic or could reflect broader shifts in the market.
Leases are just one indication of Microsoft scaling back its AI investments. TD Cowen revealed that the tech giant has abandoned several deals — dropping negotiations for over 100MW in various markets, letting more than 1GW of Letters of Intent expire on larger sites, and canceling construction on at least five land parcels in key Tier 1 areas.
Microsoft halted construction on a data center intended to serve Open AI in Wisconsin, leaving $3.3 billion in uncertainty. In stark contrast to this pause, the tech giant had, in January 2025, committed to an $80 billion investment in American data centers. Alongside this ambitious spending, Microsoft is also embracing small modular nuclear reactors to power its facilities, and is even reigniting a long-dormant reactor project at Three Mile Island.
Microsoft’s recent actions have sparked worry within the crypto community, with some speculating that the company may be pulling out of OpenAI’s Stargate project.
U.S. President Donald Trump unveiled “Stargate,” a $500 billion, privately funded initiative aimed at establishing a nationwide network of state-of-the-art AI data centers.
On X, user NIK declared that Microsoft’s involvement in the project is “over.” Their comment has triggered a range of responses within the crypto community, with some users speculating that the shift could be linked to the recent emergence of DeepSeek in the market.
However, other X users have speculated whether there is truth to the rumors.
Microsoft is closely tied to OpenAI, the organization responsible for developing the widely popular ChatGPT.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
