A week ago, analyst TD Cowen revealed that Microsoft had canceled leases "totalling a couple hundred MWs," with "at least two private data center operators across multiple US markets." The report also details how Microsoft "pulled back on converting negotiated and signed Statement[s] of Qualifications (SQQs)," which it added
It seems like Microsoft has recognized what a money pit OpenAI is and will continue to be. If OpenAI turns out to be a failure what happens to generative AI in general. Tech always needs a “next big thing” to grow and raise money. Mature technologies aren’t useful for this purpose. Maybe tech has peaked and we’re in a phase where we’ll get incremental improvements with no big breakthroughs.
It could also be the result of deepseek. Microsoft could be forcing a constraint on its development in order to push innovation towards more efficient models.
It seems like Microsoft has recognized what a money pit OpenAI is and will continue to be. If OpenAI turns out to be a failure what happens to generative AI in general. Tech always needs a “next big thing” to grow and raise money. Mature technologies aren’t useful for this purpose. Maybe tech has peaked and we’re in a phase where we’ll get incremental improvements with no big breakthroughs.
It could also be the result of deepseek. Microsoft could be forcing a constraint on its development in order to push innovation towards more efficient models.