Microsoft has announced it is 'slowing or pausing' some data centre construction projects, including a$1 billion plan in Ohio, amid shifting demand for AI infrastructure.

The company confirmed it would halt early-stage development on rural land in Licking County, near Columbus, and will repurpose two of the sites for farmland.

The decision follows Microsoft's rapid scaling of infrastructure to meet the soaring demand for AI and cloud services, which has since softened. The company acknowledged that such large projects require continuous adaptation to align with customer needs.

While Microsoft did not specify other paused projects, it revealed the suspension of later stages of a Wisconsin data centre expansion.

The slowdown also coincides with changes in Microsoft's partnership with OpenAI, with the two companies revising their agreement to allow OpenAI to build its own AI infrastructure. This move reflects broader trends in AI computing needs, which are expensive and energy-intensive.

Despite the pause in Ohio, Microsoft plans to invest over$80 billion in AI infrastructure this fiscal year, continuing its global expansion, though it will now strategically pace its growth to align with evolving business priorities.

Local officials in Licking County expressed their disappointment, as the area had been a hub for significant tech investments, including those from Google and Meta.