Microsoft shelves another $1bn data center project as tariff fears rise

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Microsoft puts its plans on pause

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  • Microsoft will “not be moving forward at this time” with its Ohio data centers
  • Work was meant to start as early as July 2025
  • Other projects also reportedly cancelled

Microsoft has reportedly put its plans for new data center campuses in New Albany, Heath and Hebron in Ohio on hold amid economic concerns relating to tariffs.

The company shared in an email with TechRadar Pro: "After careful consideration, we will not be moving forward at this time with our plans to build data centers at the Licking County sites."

The halt doesn’t mark the complete ditching of Microsoft’s plans, though, with the company retaining its possession of the land for potential future developments.

Microsoft’s data center plans impacted by tariffs

Microsoft continued to confirm to TechRadar Pro that it would facilitate farming at two of its sites in a welcome development to the areas’ biodiversities and economies, and that it would also continue with its infrastructure plans to develop roads and other utilities to boost the regions.

"We will continue to invest in and collaborate with local organizations to support digital skills development, restoration efforts, and to strengthen the communities in Licking County for future generations," Redmond added.

The plans first came about in October 2024, just a couple of months before Trump took office, with $420 million allocated for New Albany and work originally set to start in July 2025.

Microsoft’s Heath and Hebron sites were set for their construction phases later in 2025 and 2026, with the three locations promising hundreds of direct jobs as well as other opportunities relating to development and construction. Its three projects were set to cost Microsoft $1 billion.

Separate Data Centre Dynamics reporting also alleges Microsoft has backed out of as much as 2GW of data center projects in the US and Europe, alongside further cancellations in APAC and the UK.

Among the key potential drivers was that steel and aluminium imports were hit with 25% tariffs in March 2025, and while Trump may have reversed some tariffs just this week, market volatility continues, as does Microsoft’s cautious approach.

A Microsoft spokesperson also told us that the copmany's plans to spend on $80 billion on infrastructure this fiscal year remain on track.

"We plan our datacenter capacity needs years in advance to ensure we have sufficient infrastructure in the right places. As AI demand continues to grow, and our datacenter presence continues to expand, the changes we have made demonstrates the flexibility of our strategy," they added.

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Craig Hale
Craig Hale

With several years’ experience freelancing in tech and automotive circles, Craig’s specific interests lie in technology that is designed to better our lives, including AI and ML, productivity aids, and smart fitness. He is also passionate about cars and the decarbonisation of personal transportation. As an avid bargain-hunter, you can be sure that any deal Craig finds is top value!

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