March 26 (Reuters) - Microsoft ( MSFT ) has abandoned

data center projects set to use 2 gigawatts of electricity in

the U.S. and Europe in the last six months due to an oversupply

relative to its current demand forecast, TD Cowen analysts said

on Wednesday.

The tech giant's backtracking includes deferrals and

cancellations of existing data center leases in both regions in

the past month, the analysts led by Michael Elias said in a

note.

Microsoft's ( MSFT ) withdrawal from new capacity leasing was largely

led by the decision not to support additional training workloads

from ChatGPT maker OpenAI, according to the note.

Investor skepticism about the hefty artificial intelligence

spending by U.S. tech firms has increased due to slow payoffs

and the rise of Chinese startup DeepSeek, which showcased AI

technology at a much lower cost than its Western rivals.

TD Cowen's supply chain checks indicate that Microsoft's ( MSFT )

pullback has led to Alphabet's Google stepping in to

backfill the capacity in international markets, while Meta

Platforms ( META ) does the same in the U.S.

Microsoft ( MSFT ), which plans to invest over $80 billion in AI and

cloud capacity this fiscal year, did not immediately respond to

Reuters' request for comment.

The TD Cowen analysts said in February that Microsoft ( MSFT ) had

scrapped leases totaling "a couple of hundred megawatts" of

capacity with at least two private data center operators.