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.

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.

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.

An analyst note flagging a possible slowdown by Microsoft in leasing data center capacity grabbed the market's attention on Monday, lending credence to skepticism among investors worried that the AI-led stock-market boom might be running out of steam.

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

Microsoft is canceling some data center leases. But what, if anything, does that mean for the technology giant's billions planned for Racine County?