Microsoft is reportedly walking back some data center plans

After a January announcement that it would spend $80 billion on data center construction, Microsoft may already be adjusting its future plans. Sources told Bloomberg that Microsoft has delayed or slowed data center efforts in Indonesia, the UK, Australia, Illinois, North Dakota and Wisconsin. Some of the cases meant withdrawing from negotiations, while others have involved delays on planned construction projects, according to these insiders. These data centers would be central to Microsoft's efforts to develop more capabilities around artificial intelligence.

Despite the apparent shift in its approach, a Microsoft rep told Bloomberg that the company still plans to hold to its $80 billion spending budget on data centers during its 2025 fiscal year. Engadget has reached out for confirmation and will update if we receive comment from Microsoft. That was the figure laid out in a blog post attributed to Vice-Chair and President Brad Smith. The post, published days before President Trump's inauguration, included some ingratiating language for the new administration. "The country has a unique opportunity to pursue this vision and build on the foundational ideas set for AI policy during President Trump’s first term," it reads. "At Microsoft, we are excited to take part in this journey."

Microsoft's plans could have been influenced by looming tariffs, which had been threatened and were finally introduced this week by President Trump. The trade policy is likely to make large infrastructure plans more expensive and has already caused uncertainties on Wall Street. It could be that the company will still spend in the ballpark of $80 billion but will not be able to complete as many locations as it had previously calculated. Or it could be that in the months since presenting its forecast, Microsoft has already seen a reduction in expected demand.