In recent years, data centers have become critical infrastructure—powering everything from cloud services to AI applications but cancellations and delays are looming. But while demand continues to rise, the construction pipeline for data centers has hit major roadblocks. Across the globe, several high-profile projects have either been delayed, paused, or cancelled entirely.
Why? The causes vary but typically include:
- Grid capacity constraints and delays in utility approvals
- Skyrocketing construction costs and rising equipment tariffs
- AI-fueled overbuilding leading to market saturation fears
- Land use disputes, supply-chain slowdowns, and regulatory uncertainty
These challenges have forced even the biggest players in the tech space—like Microsoft and Amazon—to hit the brakes on some billion-dollar plans even while states compete to lure data center construction projects.
Here are some of the most significant data center project cancellations and delays recently observed:
Microsoft Scales Back 2GW of Projects Globally
Microsoft, a leader in hyperscale development, has dramatically scaled back its construction plans. Over the past year, the company has either canceled or paused up to 2 gigawatts of planned capacity in the U.S. and overseas.
Key affected sites include:
- Licking County, Ohio: A $1 billion campus is on indefinite pause. Two of the planned three sites have reportedly reverted to farmland use.
- Mount Pleasant, Wisconsin: Construction was paused for redesign and technology reassessment.
- Other regions: Delays or cancellations have also hit sites in Australia, the UK, Illinois, and North Dakota.
Microsoft has cited oversupply risk, evolving AI workloads, and high construction costs as core reasons for the pullback.
AWS Suspends Data Center in Minnesota
Amazon Web Services has paused plans to build a large data center campus in Becker, Minnesota, despite earlier approvals. The delay is reportedly due to uncertainty around tax exemptions, particularly related to electricity usage.
Local leaders had hoped the project would replace jobs lost from a retiring coal plant. But with legislation under review, the project is now on hold.
Global Headwinds Disrupt Construction Timelines
Outside of the U.S., delays are also mounting:
- Indonesia and Southeast Asia: Projects face setbacks due to limited grid infrastructure and difficulty importing specialized equipment.
- UK and EU: Power connection delays and stricter environmental permitting have slowed progress in London and other key data center hubs.
- Cooling technology supply issues: Some U.S. sites report delays of up to 6–12 months due to long lead times for energy-efficient cooling systems.
Financial Toll of Delays
Industry analysts estimate that delaying a typical 60MW data center project can cost developers up to $14 million per month in lost opportunity and return on investment.
Add that to material inflation, labor shortages, and utility interconnection delays—and you get a perfect storm that’s forcing developers to rethink timelines.
What It Means for the Industry
The recent wave of delays and cancellations does not mean the end of data center growth—but it signals a strategic shift.
- Developers are becoming more selective, prioritizing markets with grid stability and tax incentives.
- AI is reshaping demand, but also leading to overestimations in infrastructure needs.
- Governments and utility providers will play a larger role in shaping future expansion.
For construction professionals, investors, and suppliers, this creates both risk and opportunity. Those who can offer cost-efficient, scalable, and grid-friendly solutions will be well-positioned in the evolving landscape.
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