Microsoft Forecasts Show Data Center Crunch Persisting Into 2026

Microsoft Corp.’s data center crunch will continue for longer than the company previously outlined, underscoring the software giant’s struggles to keep up with cloud demand, Brody Ford reported for Bloomberg News.

Microsoft's current constraints could continue through the end of 2025. (Photo: Justin Baeder Flickr)

Many of Microsoft’s U.S. data center regions are experiencing shortages of physical space or servers, according to people familiar with the company’s internal forecasts.

New subscriptions for Azure cloud services are restricted in some crucial server-farm hubs—including Northern Virginia and Texas—through the first half of next year, said the people, who requested anonymity to discuss internal forecasts.

That’s a longer time frame than the company had previously indicated. In July, Chief Financial Officer Amy Hood said current constraints would continue through the end of 2025.

The lack of capacity affects machines running graphics processing units (GPUs) typically used for artificial intelligence (AI), as well as data centers dominated by central processing units (CPUs), which have long been the workhorse chips for traditional cloud services, the people said.