An govt cautioned throughout Microsoft’s earnings name on Wednesday that prospects would possibly face AI service disruptions as demand outstrips the corporate’s potential to convey information facilities on-line.
Microsoft’s EVP and CFO Amy Hood mentioned through the firm’s fiscal 2025 third-quarter earnings name that the corporate could face AI capability constraints as early as June.
“We had hoped to be in steadiness by the tip of This fall however we did see some elevated demand, as you noticed by means of the quarter,” Hood mentioned. “So we’re going to be a little bit quick, a little bit tight as we exit the 12 months.”
The timing of Hood’s assertion is fascinating as a result of Microsoft has reportedly canceled a number of information middle leases this 12 months.
In February, funding financial institution TD Cowen printed a memo that Microsoft canceled a number of information middle leases that equated to a “couple hundred megawatts” or the equal of two information facilities. Within the two months since, there have been a number of reviews of further information middle lease cancellations.
Microsoft says these two situations are usually not essentially associated. The corporate reiterated as we speak that it’s nonetheless dedicated to investing $80 billion into information facilities this 12 months — because it initially earmarked originally of this 12 months. Half of that determine is for U.S.-based information facilities.
Hood additionally added that demand as we speak and demand tomorrow are usually not the identical factor.
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“Only a reminder, these are very lengthy lead time choices; from land to construct out, it may be, , lead occasions of 5 to seven years, two to 3 years,” Hood mentioned. “So we’re always in a balancing place as we watch demand curves.”
Microsoft CEO Satya Nadella mentioned on the prime of the earnings name that the corporate opened information facilities throughout 10 new international locations and 4 new continents throughout this previous quarter.
