Microsoft’s abrupt decision to shelve plans for new data centers boasting 2 gigawatts of power across the US and Europe has jolted the AI infrastructure race, sending stocks tumbling and exposing a rare moment of hesitation in the tech giant’s AI ambitions. As Reuters reported on March 26, 2025, analyst firm TD Cowen points to a possible oversupply of computing capacity for AI models—a sobering reality check for an industry intoxicated by the promise of artificial intelligence. The market felt the sting immediately: Siemens Energy and Schneider Electric shed 4-5%, while US utility titans Constellation Energy and Vistra cratered over 7%, according to Bloomberg.
Microsoft, however, doubles down on its $80 billion AI budget for 2025, spinning this as a tactical shift—focusing on existing projects and efficiency—rather than a full retreat. Yet, this pivot cracks open a critical question: Has the AI gold rush overshot demand, leaving giants like Microsoft to quietly recalibrate?
The ripple effects reveal a fractured landscape. While Microsoft dials back, Meta, Amazon, and Alibaba barrel forward with their own AI infrastructure empires, betting big on a future where compute is currency.
The Wall Street Journal’s Barron’s highlights investor nerves, suggesting this isn’t just about Microsoft but a broader unease over AI’s short-term payoff. The stock dips might prove temporary, but they underscore a truth: even the deepest pockets can’t ignore market signals forever.
Sign up for Cyber News Centre
Where cybersecurity meets innovation, the CNC team delivers AI and tech breakthroughs for our digital future. We analyze incidents, data, and insights to keep you informed, secure, and ahead.
No spam. Unsubscribe anytime.