--- title: "Something’s Gone Wrong With Microsoft’s Huge AI Data Center Investments" description: "As the global economy crumbles into dust, Microsoft is reversing course on its spendy data center plans to fuel AI." date: "2025-04-03" modified: "2025-04-03" authors: - name: "Joe Wilkins" job_title: "Correspondent" link: "https://futurism.com/authors/jwilkins" url: "https://futurism.com/microsoft-huge-data-center-investments-tariffs" categories: - "Artificial Intelligence" --- # Something’s Gone Wrong With Microsoft’s Huge AI Data Center Investments ![As the global economy crumbles into dust, Microsoft is reversing course on its spendy data center plans to fuel AI.]() *\Image: Getty / Futurism\* Data centers are everywhere. As the world's tech companies demand more computing power to make their software run, the facilities have popped up in every corner of the planet. They make up the backbone of global network servers, cloud computing — and of course AI. Microsoft has been a major player in the global data center boom, but its ambitions may now be faltering, in a bellwether for the AI industry. The tech behemoth recently decided to scale back data center projects around the globe, in countries including the UK, Australia, and Indonesia. It's likewise pulled back on data center development in Illinois, North Dakota, and Wisconsin, [according to *Bloomberg*](). That's on top of last week's news that Microsoft had walked away from two data center projects in the [US and Europe](), piling on to a February announcement that it was [cancelling data center leases](). Microsoft's moves are a brisk 180 from the company's early-January plans to spend [$80 billion]() on AI data centers in 2025. They come as the greater US economy crumbles in reaction to Donald Trump's so-called "[reciprocal tariffs]()," which some analysts say are more akin to war-time [economic sanctions](). "These are just sanctions, imposed to intimidate countries and companies into submission like they're universities or law firms," [said David Dayen](), executive editor of *The Prospect*. "They're what a mob boss would do." Trump's tariffs are likely to have a hugely negative impact on the US tech sector more broadly, and on data centers specifically. Once these tariffs go into place, the prospect of building [new data centers]() will become much more risky, as foreign-made resources skyrocket in price. Running existing facilities will likewise come at a premium, as [renewable energy growth]() slows to a crawl and [traditional energy costs]() soar. That's not to mention the already shaky ground of AI development. In recent months, some investors have grown wary that an [economic bubble]() was forming around the AI industry — a hypothesis that Microsoft's rollback would seem to support. The shaky [CoreWeave IPO]() and [nonexistent AI profits]() don't help. It's all piling up into a record low day for tech stocks, especially whales like Microsoft, which hit a [one-year low]() as soon as the gates opened on Wall Street this morning. In all, the [top seven US tech stocks]() — Microsoft, Tesla, Nvidia, Alphabet (Google), Apple, Meta, and Amazon — are poised to shed over $800 billion in market capacity today, a huge chunk of the [$3 trillion in S&P 500 value]() erased in the 10 weeks since Trump took office. We now sit on the precipice of a [new economic era](). How this all shakes out for companies like Microsoft will probably be a tale for the history books. When it comes to tech, one thing's for sure: the AI hype train is now screaming out of the station. **More on AI investments:** [*Majority of AI Researchers Say Tech Industry Is Pouring Billions Into a Dead End*]() ## Author At Futurism, I focus on the intersection of technology and power — examining the economics, history, and politics behind today’s dystopian headlines. As a writer, I’m interested in topics ranging from AI’s impact on labor to startups nobody asked for. My prior work includes bylines in Jacobin, Verso, and Blue Labyrinths. My work for Futurism has been cited by publications including Forbes, The Guardian, MIT Technology Review, Time, The Nation, Mother Jones, The Verge, and Wired. I grew up in Michigan, attending Central Michigan University as well as Ball State University, where I earned a master of music. I now live in Brooklyn with my girlfriend and our cat Ziti. On weekends, you can find me hunched over a cold pint arguing geopolitics with the other transplants. ### Author social links [Bluesky]()