Microsoft Corporation MSFT has decided to suspend its billion-dollar data center project in Licking County, Ohio. This decision marks the most recent in a line of data center project cancellations by the software behemoth.
What Happened: Microsoft has backed out of its earlier commitment to invest $1 billion in three data center campuses located in New Albany, Heath, and Hebron. This decision aligns with the company’s recent trend of pulling out from data center projects across the US, Europe, APAC, and the U.K., reported The Columbus Dispatch.
The original plans, unveiled in October, involved a $420 million investment for the New Albany data center campus, which had been granted a 15-year tax abatement by the City Council. The data center was slated to occupy a 200-acre site with construction set to commence in July 2025.
A Microsoft spokesperson told the publication, “We will continue to evaluate these sites in line with our investment strategy.” The company also reaffirmed its plan to retain ownership of the land and proceed with development at a future date yet to be determined.
Why It Matters: This decision by Microsoft follows a pattern of similar project cancellations. Earlier this month, the tech giant had halted discussions and postponed the development of sites in several locations including the UK, Australia, and the U.S., due to concerns over semiconductor tariffs and AI overcapacity.
Earlier in February, Microsoft had begun to cancel leases for a significant portion of its AI data center capacity in the U.S., hinting at a potential oversupply situation. TD Cowen’s analysts were the first to highlight the issue, speculating that lease cancellations and capacity deferrals indicate a data center oversupply relative to Microsoft’s current demand forecast.
Notably, in January, Microsoft unveiled plans to invest nearly $80 billion in developing AI-powered data centers and deploying AI and cloud-based applications globally.
Meanwhile, Noelle Walsh, Microsoft Cloud president, stated on LinkedIn that the company is on course to fulfill its capex commitment for the year, adding, “Data center planning is a multi-year and capital-intensive program… we are slowing or pausing some early-stage projects. While we may strategically pace our plans, we will continue to grow strongly and allocate investments that stay aligned with business priorities and customer demand.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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