Microsoft has pushed back against claims its decision to cancel and defer at least 2GW of datacentre projects in the US and Europe is indicative of its “fraying relationship” with OpenAI.

US analyst TD Cowen published a research note on 26 March 2025 that suggested the public cloud giant had cancelled and deferred datacentre lease agreements in the US and Europe that would have increased its compute capacity by at least 2GW.

The reason for the rollback on its plans was, according to TD Cowen, due to Microsoft’s decision not to support OpenAI’s incremental training workloads.

TD Cowen had previously said the two companies were involved in a “fraying relationship”, after Microsoft confirmed in January 2025 that the exclusivity cloud hosting deal between the two firms had been rejigged.

A Microsoft blog post, dated 21 January 2025, confirmed OpenAI had made a “large Azure commitment” that included “changes to the exclusivity on new capacity, moving to a model where Microsoft has a right of first refusal”.

This means Microsoft gets first refusal on whether or not it wants to host OpenAI workloads, but OpenAI also reserves the right to build its own capacity with other partners if Microsoft cannot meet its needs.

Microsoft has now issued a statement to Computer Weekly, pushing back on TD Cowen’s take on the situation, while also restating the strength of the working relationship between the company and OpenAI.

In reference to its decision to scale back its datacentre expansion plans, Microsoft said it’s “well-positioned” to meet the current and increasing customer demand it’s seeing for its services thanks to the “significant investments” it’s made in its infrastructure to this point.

“Last year alone, we added more capacity than any prior year in history,” said a Microsoft spokesperson. “While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions.

“This allows us to invest and allocate resources to growth areas for our future. Our plans to spend over $80bn on infrastructure this financial year remain on track as we continue to grow at a record pace to meet customer demand.”

Microsoft has been a partner in OpenAI since 2019, with the two firms previously stating that they were working towards a shared goal to “responsibly advance artificial intelligence research” while democratising the technology and making it accessible to all.

Around the same time that Microsoft released details of its reworked cloud hosting arrangement with OpenAI, the latter released details of its $500bn effort to expand the infrastructure underpinning its services through the launch of the Stargate Project.

Softbank, Oracle, MGX and OpenAI are the equity funders for the initiative, while Microsoft is listed as a technology partner.

In reference to its ongoing partnership with OpenAI, the Microsoft spokesperson said: “OpenAI continues to be a great partner. We remain committed to pushing the frontier of AI forward, driving innovation, and making cutting-edge models accessible to our customers and partners.”

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