Wipe out or buy?, page-28

Just doubled down today. Not often gifts like this remain for long. The USA news from Microsoft is small or possibly a very smart move by them?

Recent news regarding Microsoft's datacenter and nuclear energy initiatives reveals a complex landscape of investments, partnerships, and potential shifts in strategy:

• Datacenter Lease Cancellations: Microsoft has reportedly canceled several data center leases with U.S. operators, totaling "a couple of hundred MWs" of capacity15. This move has raised questions about potential overestimation of AI service demand and compute power needs5.

• AI-Enabled Datacenter Investment: Despite the cancellations, Microsoft announced plans in January 2025 to invest $80 billion in building AI-enabled data centers during the 2025 financial year2. This significant increase from the previous year's $53 billion capex spend reflects the company's commitment to AI infrastructure2.

• Nuclear Power Partnerships:

  • Microsoft has entered a 20-year agreement to purchase electricity from the Three Mile Island nuclear facility in Pennsylvania, which is set to reopen in 20286. This deal aims to provide sustainable energy for Microsoft's expanding AI data centers6.

  • The company is also exploring the use of advanced nuclear reactors for powering data centers. TerraPower, founded by Bill Gates, has announced a collaboration with Sabey Data Centers to deploy Natrium plants for existing and future facilities3.

• Potential Strategy Shift: The recent lease cancellations and reallocation of international spending to the United States suggest Microsoft may be reassessing its datacenter strategy5. This could be due to changes in demand forecasts, particularly related to OpenAI workloads5.

• Sustainability Efforts: In Wisconsin, Microsoft announced a 250-megawatt solar project to help power a new AI data center7. However, this initiative has faced criticism as the regional utility has applied to build two new natural gas-burning power plants to meet the data center's full electricity demands7.

These developments highlight Microsoft's ongoing efforts to balance rapid AI infrastructure growth with energy sustainability concerns, while also navigating changing market demands and partnerships in the tech industry.

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Microsoft used power and facility delays to justify the cancellations, which “is the same tactic that Meta used to cancel multiple data center leases in the U.S. after… Meta had then canceled a $4 billion capex program related to the metaverse.”

The brokerage associated the terminations with past instances of Microsoft canceling data center construction agreements and property contracts over the last year and partially attributed the company’s cautious approach to OpenAI’s recent partnership with Oracle – which has reduced the AI leader’s dependency on Microsoft data centers.

“[A]s we believe is indicated by its decision to pause construction on a data center in Wisconsin which our prior channel checks indicated was to support OpenAl, there is capacity that it has likely procured… where the company may have excess data center capacity relative to its new forecast,” TD Cowen analysts Michael Elias, Cooper Belanger, and Gregory Williams said in the report.

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Those in this play before the ruckus AI introduced may be just fine with all of this and use it for our long term accumulation in a world wide boom in Nuclear power. Excluding Australia of course Its illegal here except for Lukas Hights and the thousands of sites using Nuclear Tech in OZ