Some of Europe's most popular AI-linked stocks fell for a second day on Tuesday, after an analyst note late last week that flagged a possible slowdown by Microsoft on data centre leasing knocked sentiment ahead of make-or-break results from Nvidia .

Microsoft Corp. has canceled some leases for US data center capacity, according to TD Cowen, raising broader concerns over whether it’s securing more AI computing capacity than it needs in the long term.

Despite a pledge made in January to spend $80 billion on AI data centers in FY 2025, a new report indicates Microsoft is already dropping some of its current data center leases.

It is being reported that Microsoft has recently canceled several data center leases in the U.S., prompting concerns about its long-term AI infrastructure strategy. According to TD Cowen, the tech giant voided agreements amounting to "a couple of hundred megawatts" of capacity, roughly equivalent to two large data centers.

TD Cowen noticed Microsoft doing something strange on Friday. The Open AI partner and tech giant appeared to be cancelling data center leases. According to the market analysts, this is part of a wider pattern. TD Cowen said Microsoft had an “oversupply” problem. It’s another datapoint that points to Big Tech’s nervousness around its big bet on AI.

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Microsoft's data center lease cancellation raises questions about the industry's staggering growth. Experts say the market still has huge potential.