When you purchase through links on our site, we may earn an affiliate commission. This doesn’t affect our editorial independence.
On Wednesday, an executive member cautioned during Microsoft’s earnings. The chief officer stated that customers may experience AI service disruptions if demand exceeds the company’s capacity. This ability enables data centers to go online productively. This is coming months after Microsoft and other companies pumped $320 billion into AI.
Moving forward, Microsoft’s EVP and CFO Amy Hood said this during the company’s fiscal 2025 third-quarter earnings call. They contended that the company may face AI service disruptions as early as June 2025.
According to Hood, they had hoped to be in balance by the end of Q4. However, they did see some increased demand, as evident throughout the quarter. He added, “So we are going to be a little short, a little tight as we exit the year.”
Interestingly, the timing of Hood’s statement is spectacular. The reason is that Microsoft reportedly canceled several data center leases in 2025 without foreseeing the potential disruptions to its AI services.
Recall that in February, investment bank TD Cowen published a significant memo. It tells how Microsoft canceled multiple data center leases—such leases equated to a couple of hundred megawatts, or the equivalent of two data centers. Two months later, several additional reports have emerged of data center lease cancellations. Microsoft contends that these two instances are not necessarily related.
Microsoft Promised to commit More Funds to avert AI Service Disruptions
The company reaffirmed its commitment to investing $80 billion in data centers this year. The company initially earmarked this amount at the beginning of this year. Half of that figure is for U.S.-based data centers.
Hood also noted the potential for AI service disruptions to occur in the future. He tied the reason to the difference between demand today and demand tomorrow, which are not the same thing.
Hood further noted in response to the AI service disruptions that, as a reminder, these are very long lead-time decisions. He said, “From land to build-out, it can be, you know, lead times of five to seven years, two to three years.” Moreover, the CFO said, “So we’re constantly in a balancing position as we watch demand curves.”
Microsoft CEO Satya Nadella stated during the earnings call that the company had opened data centers in 10 new countries. The comma also extended it to four new continents during this past quarter. Although AI service disruptions are inevitable, the company is also attempting to mitigate these constraints moving forward.
In another related news article, Microsoft Teams is set to alert users when sensitive content is shared in virtual meetings. This will begin in May 2025. This is a cutting-edge technology that will be introduced to Microsoft Teams. It will actively detect sensitive information on shared screens and notify the presenter and meeting organizers when such information is detected.
