Analysts Notice Microsoft Quietly Cancelling Data Center Leases

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. TD Cowen published its quick take on February 21 and said its research into Microsoft’s data center business had turned up something interesting. “Our channel checks indicate that [Microsoft] has 1) cancelled leases in the U.S. totalling ‘a couple of hundreds [megawatts]’ with at least two private data center operators, 2) has pulled back on the conversion of [statements of qualification] to leases, and 3) has re-allocated a considerable portion of its international spend to the U.S.” A statement of qualification or SOQ is a precursor to the signing of a lease. TD Cowen noted that the conversion rate of an SOQ into a signed lease is almost ... Read full article.