Does the 500 billion dollar AI boom in the United States stop? Microsoft strokes several planned data centers

Published on: April 14, 2025 / update from: April 14, 2025 - Author: Konrad Wolfenstein

Does the 500 billion dollar AI boom in the United States stop? Microsoft strokes several planned data centers - Image: Xpert.digital

Opposites in the AI market: euphoria or reality?

AI investment: is the big market cleaning?

Current developments in the US AI market show contradictory signals: While Microsoft surprisingly stops or delayed numerous global data center projects, other tech giants such as Openaai, Oracle and Softbank announce massive investments. These contrasts raise questions as to whether the initial AI euphoria of a more realistic market assessment deviates or whether it is only a redistribution of forces in the highly competitive AI infrastructure market.

Microsoft's surprising retreat from data center projects

Microsoft has put several planned data centers on hold worldwide in recent months. This development, which initially started outside the United States, has now also reached the domestic market. According to media reports, the software regulator has stopped or at least delayed projects in several US states such as Illinois, Wisconsin, North Dakota and Ohio.

The cancellation of the three major data center projects in Ohio is particularly remarkable. In October 2024, Microsoft announced investments of one billion dollars for locations in the towns of New Albany, Heath and Hebron, whose construction was to begin in July 2025. The company has now told local media that these projects will not be pursued for the time being, whereby the acquired land will be kept if you want to develop them later.

The list of paused or painted projects also includes international locations:

Negotiations on an area were ended near London that would have been particularly suitable for using powerful Nvidia chips
In Jakarta, the expansion of an existing data center rests
A 3.3 billion dollar project in Wisconsin is currently broke, despite already invested $ 262 million
In North Dakota, a planned partnership with the provider Applied Digital failed

According to estimates by analysts from the TD Cowen investment bank, the projects of a total of around 2 gigawatts, which were stopped by Microsoft, include.

Possible reasons for Microsoft's strategy change

Microsoft itself remains cautious when explaining the reasons for this change of strategy. A company spokesman only confirmed to Bloomberg that changes to the data center plans were made: "Since the demand for AI continues to grow and our presence in data centers is expanded, the changes made show the flexibility of our strategy".

Experts and market observers discuss several possible explanations for the surprising retreat:

Changed partnership with Openaai: The relationship between Microsoft and its most important Ki partner Openai seems to change. Openai is now looking for additional partners for his computing capacities.
Efficiency increases in AI technologies: New approaches, such as the Chinese model Deepseek, promise a 40-50 higher efficiency compared to existing systems. This development could reduce the need for large data centers.
Realistic assessment of the demand: Microsoft CEO Satya Nadella recently said that he would expect an oversupply of computing capacity for the coming years, which would lead to falling prices. This assessment indicates a more careful attitude towards AI growth.
Technical challenges: power supply bottlenecks and the availability of special components such as graphics cards could also play a role.

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“Stargate AI” – US President unveils $500 billion project for US AI dominance

The Stargate project: a new 500 billion dollar giant

While Microsoft is rethinking its expansion strategy, Openai, Oracle and Softbank have announced an ambitious joint project called “Stargate”. US President Donald Trump personally presented the project in the White House. The dimensions are impressive:

Investments of up to $ 500 billion are planned in the long term, with a first tranche of $ 100 billion
Around 100,000 jobs are to be created in the next four years
The first data centers are already being built in Texas
As the fourth investor, the MGX technology fund from the United Arab Emirates is involved

Oracle boss Larry Ellison emphasized the transformative power of the project, especially for the health sector: “The AI systems developed there should not only produce new technology-Ellison also sees them the key to the revolution of healthcare. In the future, KI can help with the development of personalized vaccines against cancer".

Stargate marks a strategic turning point for Openaai. So far, the company has mainly used Microsoft data centers for its AI systems. With the new project, the company is now building its own capacity for the first time on a large scale, which underlines the changed dynamics between the two companies.

AI infrastructure boom in the USA stops

Despite Microsoft's reluctance, many indicators indicate that the expansion of AI data centers in the United States continues to progress. According to the Bloom Energy analyzes, computing power in American data centers is likely to increase to 80 gigawatts by 2030, which corresponds to an average annual growth of 20 percent.

In March 2025, the advisory company Wood Mackenzie had a total of 177 projects that are under construction or planning, with an investment volume of around $ 195 billion. In addition to established locations such as Virginia, new data center clusters are increasingly being created:

Meta is building its largest data center to date for $ 10 billion in the agricultural Richland Parish in Louisiana
The Stargate project chose the west of Texas as the first location, since the region offers optimal conditions for energy generation
New production locations for data center components are built by companies such as Stulz, Siemens, Schneider Electric and ABB in the USA

Parallels to the situation in China

The question of the article asked refers to a report by Xpert.digital, according to which in China “the AI bladder has burst” and new data centers are supposed to be empty. This situation could actually have parallels to the current developments in the United States.

In particular, the mention of the Chinese AI startup Deepseek in the search results is remarkable. Its new voice models promise a 40-50 higher efficiency compared to existing systems. This technological development fundamentally questions the previous capacity planning of how Goldman Sachs-Analyst Rich PrivoRototky is cited: "If you can achieve more with less, the question arises as to whether the massive capacity expansion is necessary at all".

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AI boom in China or is the AI bubble bursting now? Hundreds of new data centers are empty

Effects on the capital market

Microsoft's decision to stop numerous data center projects already had a noticeable impact on the stock market. According to a report, the shares of companies that are connected with artificial intelligence have been very popular:

Vertiv Holdings fell by 10.79 %
Broadcom recorded a decline of 4.78 %
Super Micro Computer fell by 8.86 %
Arista Networks lost 6.07 % of value

Analysts from the investment bank TD COWEN see the reason that Microsoft originally planned these projects for the training of Openai models, which no longer seems to be necessary to date. This market reaction indicates that investors may correct their expectations of the growth pace in the AI sector downwards.

Does the path lead to consolidation and efficiency?

The current developments indicate a more complex trend than a simple “burst of the AI bubble”. Rather, the market seems to differentiate and consolidate:

Efficiency increases: New AI models may need less hardware than previous generations.
Strategic realignment: Microsoft apparently focuses more on the upgrade of existing data centers than on new buildings.
Specialized providers: So-called “neoclouds” such as Crusoe, CoreWeave and Lambda, which focus on the specific requirements of AI workloads, gain in importance.
Infrastructure challenges: The availability of energy and specialized hardware becomes a limiting factor, which drives companies into innovative solutions such as reactivating the Three Mile Island nuclear power plant.

From euphoria to efficiency: how the AI market is realized

The 500-billion dollar AI boom in the USA does not fundamentally stall, but it goes through a phase of re-evaluation and realignment. Microsoft actually significantly reduces its expansion plans, but states to invest around $ 80 billion in AI data centers by the end of June 2025. At the same time, other actors such as the Stargate consortium invest massively in new capacities.

This development could be less a sign of the end of the AI boom than for its maturation. The initial euphoria gives way to a more differentiated view, in the foreground in efficiency, strategic partnerships and sustainable business models. The coming years will show whether the gigantic investments in AI infrastructure bring the hoped-for economic benefit or whether they were actually oversized.

In this sense, the AI boom does not stand still, but goes through a natural evolution from unlimited optimism to more realistic market assessments-a classic pattern that can be observed again and again in technological innovation cycles.

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