Microsoft(US:MSFT) Z Finance·2025-04-05 03:20Core Viewpoint - Microsoft has made significant adjustments to its global data center strategy, pausing or delaying multiple construction projects in various countries, reflecting a reevaluation of its AI and cloud computing infrastructure plans [1][2]. Summary by Sections Strategic Adjustments - Microsoft has suspended or postponed negotiations for new data center projects in Indonesia, the UK, Australia, and several states in the US, indicating a reassessment of market demand for AI services and cloud infrastructure [1]. - The company plans to continue with a $3.3 billion investment project in Wisconsin, which is expected to be operational next year [2]. Market Reactions - The strategic shift has led to a ripple effect in the tech sector, with companies like Nvidia experiencing stock price pressure due to their close ties to data center budgets [1]. - As of the latest market close, Microsoft's stock fell by 2.3% to $373.32, marking a year-to-date decline of 9% [1]. Industry Insights - Analysts suggest that the adjustments may signal an oversupply in data center capacity relative to current demand, with a total power capacity of approximately 2 gigawatts being affected by Microsoft's project cancellations [4]. - Concerns have been raised about the potential for an industry bubble, as Alibaba's chairman noted that the pace of data center construction may have outstripped actual demand for AI services [4]. Operational Flexibility - Microsoft emphasizes its strategic flexibility in planning data center capacity over several years, adapting to the dynamic development of AI demand and the ongoing expansion of data center scale [2]. - The company is expected to maintain an $80 billion budget for data center construction this fiscal year but will moderate the pace of new projects in the next fiscal year, focusing on optimizing existing facilities [4].