Edward Conard

Top Ten New York Times Bestselling Author

  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
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  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
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AI Summary. Microsoft has voided data center leases totaling a couple of hundred megawatts of capacity and stopped converting preliminary agreements into formal leases, according to brokerage TD Cowen's checks with supply chain providers. TD Cowen also says Microsoft is redirecting some planned international spending to the US, suggesting a material slowdown in international leasing.

Ryan Vlastelica and Newley Purnell Bloomberg
Date Posted:

Is Microsoft growing more cautious about demand for AI? A TD Cowen report found that the company has started canceling leases for a “substantial” amount of data center capacity.

Is a major tech company pulling back on AI data center leases?

Core argument: Microsoft has voided AI data center leases totaling "a couple of hundred megawatts" of capacity, according to TD Cowen, which cited channel checks with supply chain providers.

Microsoft OpenAI’s biggest backer has voided leases totaling “a couple of hundred megawatts” of capacity, TD Cowen reported, citing channel checks or inquiries with supply chain providers. Microsoft has also stopped converting agreements that usually lead to formal leases, TD Cowen said. That was a tactic rivals such as Meta Platforms Inc. employed previously, when it decided to cut back on capital spending, the brokerage wrote. Microsoft is redirecting a portion of its planned international spending to the US too, TD Cowen said, which “suggests to us a material slowdown in international leasing.” A potential pullback by Microsoft on spending and datacenter construction raises questions about whether the company — one of the frontrunners among Big Tech in AI — is growing cautious about the outlook for demand. The company has said it expects to spend $80 billion this fiscal year on AI data centers, and, on a late January earnings call, Chief Executive Officer Satya Nadella said Microsoft has to sustain spending to meet “exponentially more demand.”

Takeaways by Macro Roundup® AI

  1. Microsoft has voided AI data center leases totaling "a couple of hundred megawatts" of capacity, according to TD Cowen, which cited channel checks with supply chain providers.
  2. TD Cowen said Microsoft has stopped converting agreements that usually lead to formal leases, a tactic Meta Platforms used previously when it decided to cut back on capital spending.
  3. Microsoft is redirecting a portion of planned international spending to the US, which TD Cowen said suggests a material slowdown in international leasing, even as Microsoft has said it expects to spend $80 billion this fiscal year on AI data centers.

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