Diving brief:
- Microsoft “slows down or break” Artificial intelligence data center projectssaid a senior manager in a recent blog article, confirming previous reports on hindsight.
- Noelle Walsh, president of Microsoft of operations and Cloud innovation, said that she had decided to solve the problem in the middle of an increased interest in the adjustments that we provide to certain data infrastructure projects at an early stage “.
- “Although we can strategically punctuate our plans, we will continue to grow strongly and allocate investments that remain aligned with commercial priorities and customer demand,” Walsh said in the post on his LinkedIn profile.
Diving insight:
Microsoft has interrupted the talks for or delayed the development of, Data center projects around the worldBloomberg reported earlier this month, citing anonymous sources.
“In recent years, the demand for our cloud and AI services has increased more than what we could never have planned and to respond to this opportunity, we have started to execute the largest and most ambitious infrastructure project in our history,” said Walsh in his blog article. “By nature, any new important business in this size and on this scale requires agility and refinement as we learn and grow with our customers. What it means is that we slow down or take a project break at an early stage. ”
In January, Microsoft President Brad Smith said that the company planned to spend about $ 80 billion during the current financial year in AI compatible data centers to form important language models and deploy AI and cloud -based applications.
The software provider remains on the right track to achieve this goal of expenses despite Walsh’s comments, A spokesperson told CFO Dive, adding that the company had nothing to share on the issue.
The decline arises while Microsoft and other large technological companies face an in -depth examination of investors on their strong IA expenditure.
This also occurs while President Donald Trump’s pricing measures, increasingly, create additional pressure and uncertainty for technological leaders.
Wedbush analysts qualified the current tariff situation of “economic twilight zone” which created “real damage to the mentality of business expenditure”.
“We believe that 10% -15% (could be conservative) many cloud and AI initiatives in the United States that we follow on the ground could be pushed / slowed down during this period of uncertainty and Microsoft will be at the front and at the center of this economic period of uncertainty,” analysts said in a research note last week.
The administration has imposed new levies on goods imported on April 2, but has since brought some. On April 9, Trump announced a 90 -day break on certain prices on the goods of most American trade partners while imposing 125% tariffs on China, triggering a large -scale trade war with the country. China retaliated by hiking on its prices on goods imported from the United States at 125%.
The other prices that remain in place in the United States include a reference rate of 10% for targeted business partners in the April 2 announcement of Trump, as well as withdrawals imposed on imports of steel and aluminum.
In the meantime, Sunday, Commerce Secretary Howard Lutnick declared that a Friday decision by the administration to exempt electronic devices such as smartphones, iphones and laptops of reciprocal prices – including 125% levies imposed on Chinese imports – was only a temporary stay, products that should face separate direct debits in the near future.
Before Friday’s announcement, analysts predicted that the reciprocal prices would be devastating for computer material companies which have substantial exposure on production in China. Morgan Stanley analysts estimated that Apple alone was facing an annual sale impact up to $ 33 billion.
Prices can also harm the technological sector by forcing customers to tighten their IT expenses and increase the cost of raw materials such as steel necessary for the construction of data centers, according to Hank Galligan, national leader in BDO technological industry.
“Obviously, the cost will have an impact on the quantity of capacity that can be built,” he said in an interview.
