"At worst, this situation could suggest that Microsoft is actively dumping OpenAI, and is having questions about the fundamentals of the generative AI industry.
In very plain terms, Microsoft, despite its excitement around artificial intelligence and its dogged insistence that it’s the future of technology, has canceled data center leases and over a gigawatt of other datacenter infrastructure. Doing so heavily suggests that Microsoft does not intend to expand its data center operations, or at least, to the extraordinary levels the company initially promised.
While Microsoft has reiterated that it intends to spend $80 billion in capital expenditures on AI in 2025, it's unclear how it intends to do so if it’s pulling back on data center expansion at such a large scale, and the company has provided no tangible explanation or elaboration as to how it might do so. While hardware upgrades could account for some of its capital expenditures, it would be nowhere near the $80bn figure.
Again, hyperscale datacenters aren’t cheap. They’re massive, billion-dollar (or multi-billion) ventures."
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