Microsoft has announced it is "delaying" or "pausing" several data centre projects, including a planned $1 billion facility in Ohio, signalling a potential cooling of the infrastructure boom driven by artificial intelligence demand, according to a recent report by The Associated Press. 

As per the report, the company confirmed this week that it will halt early-stage work on three sites in Licking County, Ohio, converting two back to farmland while keeping one available for future development. This follows a December decision to pause later phases of a Wisconsin data centre project and comes amid reports of scaled-back international expansion plans.  

"While demand for our cloud and AI services exceeded expectations, we're now refining our approach," said Noelle Walsh, head of Microsoft's cloud operations, in a LinkedIn post, as per the AP report. The company emphasised this represents strategic pacing rather than retreat, noting plans to still spend over $80 billion globally on AI infrastructure this fiscal year.  

According to the AP report, analysts point to multiple factors behind the slowdown, including a recalibration of Microsoft's partnership with OpenAI, which recently gained the flexibility to build its own computing capacity. They also believe evolving AI model efficiency reducing some infrastructure needs as well as energy supply challenges for power-hungry data centres were concerns too.

The pause highlights broader industry questions about balancing AI growth with practical constraints. Microsoft and other tech firms are exploring alternative power sources, including nuclear energy, to sustain expansion amid rising electricity demands.