Satellite images reveal trouble brewing at Microsoft's AI data center partners
Satellite images reveal potential delays at two Microsoft AI data center projects, highlighting power and permitting challenges facing neoclouds.
Microsoft CFO Amy Hood revealed that delays by third-party cloud providers contributed to lower-than-expected AI infrastructure spending during Microsoft's quarterly earnings call. Satellite imagery suggests potential setbacks for the massive IREN and Nebius data center projects. IREN, constructing four data centers in Texas under a $9.7 billion deal with Microsoft, faced delays in delivering Horizon 4 due to missing backup power generators and cooling equipment.
DataOne, developing a $17.4 billion project in New Jersey for Nebius, could see roughly 140 megawatts of its planned capacity slip into 2027 due to permit setbacks and fuel cell approvals. These delays highlight broader struggles in the neocloud industry, with research firm Currence estimating that 30% to 50% of planned data center capacity could be delayed into 2027 or later due to electricity shortages and construction issues.
Microsoft maintains a flexible approach to infrastructure, combining its own facilities with leased spaces and third-party providers.
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