Microsoft, in an oversupply position, means the company has more data center capacity than it currently needs, according to TD Cowen.

Skepticism has been growing among investors over the billions of dollars U.S. tech firms have been channeling into AI infrastructure due to slow payoffs and breakthroughs at Chinese startup DeepSeek,

Microsoft has axed some of its leases on data centers as DeepSeek’s rapid rise casts doubt over massive US spending on artificial intelligence, according to a report. The Washington-based software giant has canceled leases in the US totaling “a couple of hundred megawatts,

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.

The move may reflect concerns about whether it’s building more AI computing than it will need over the long term, TD Cowen said in a report.