Microsoft puts $1bn data centres project on hold amid tariff concerns

Microsoft has shelved its ambitious $1 billion data centre expansion in Ohio, citing a reassessment of its investment strategy amid growing concerns over escalating costs fueled by United States President Donald Trump’s tariffs.

The tech giant initially unveiled the project last year, planning significant infrastructure in New Albany, Heath, and Hebron. However, on Monday, the company confirmed it was postponing the plans and may revisit them at a later stage.

“We will continue to evaluate these sites in line with our investment strategy,” a Microsoft spokesperson told The Columbus Dispatch, expressing gratitude to state leaders and local residents for their continued support.

This decision coincides with analysts' warning that Trump’s proposed reciprocal tariffs on tech equipment could significantly hinder the efforts of major US technology firms —particularly in scaling artificial intelligence infrastructure — due to rising operational costs.

Microsoft's initial investment was set at $700 million in building costs and $300 million in machinery expenses, and construction was expected to start in July.

The project was supposed to create 400 construction jobs and hundreds of full-time jobs. Each of the three campuses was supposed to have one building, with the potential for several buildings on each site, The Dispatch reported.

According to the local news outlet, the New Albany City Council unanimously passed a resolution last year giving Microsoft a 15-year 100% property tax abatement.

Despite backing out of the data center project, the company committed to following through with its development agreements to fund roadway and utility upgrades and said the land could be used for farming.

The facilities were set to serve as the backbone for Microsoft Azure's capabilities as the demand for data storage and cloud technology increased.

However, Trump's tariffs are a new threat to the top cloud service providers such as Microsoft, Alphabet and Amazon, already facing skepticism from investors over their steep AI budgets.

TD Cowen analysts recently said that Microsoft had abandoned data-center projects that would have used 2 gigawatts of electricity in the US and Europe in the last six months due to an oversupply relative to current demand.