MS scaling back data centers, SoftBank stretching even futher
2025-03-04 00:12:12.144162+01 by Dan Lyke 0 comments
As a result, based on TD Cowen's analysis, Microsoft has, through a combination of canceled leases, pullbacks on Statements of Qualifications, cancellations of land parcels and deliberate expiration of Letters of Intent, effectively abandoned data center expansion equivalent to over 14% of its current capacity.
And, yeah, the Microsoft pullback is the first part of this, but make sure you get down to the funding of the "Stargate" project and Softbank borrowing money to invest in his.
No, wait, read down further to the discussion about how this all ties together in predicting demand, especially as OpenAI is moving features that were part of the "Pro" package down into the cheaper packages, in a way that sure feels a lot like "maybe this time they'll like it?", and how Microsoft's language about demand suggests that Microsoft thinks that LLMs and Generative AI have gotten into the commodity phase, where we're not gonna see a lot of improvement, and now it's about delivering the current level of technology cheap enough to turn a profit with. Which is a hell of a lot cheaper than right now.