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The AI Bubble has finally popped
Posted on 4/4/25 at 1:36 pm
Posted on 4/4/25 at 1:36 pm
This announcement was March 26. Everyone knew and was warned this was going to happen after the Deepseek announcement. I believe we had some posters bragging they purchased Nvidia stock at $116 back then. 
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3
Posted on 4/4/25 at 1:38 pm to John Barron
Next is the quantum pop. Lots of money poured in for no real-world results beyond speculation.
Posted on 4/4/25 at 1:39 pm to John Barron
I think it will level out but this isn't news of a pop. There was a rush to get the most data centers up fast to dominate the market. MS is only scaling back some centers because everyone else was able to get data centers online as fast as they were. In short, they planned for more, but the market worked itself out and no one is dominating the AI data center game currently.
Posted on 4/4/25 at 1:49 pm to stout
Deepseek proved you did not need the Capex these companies were spending. Not to mention the business model was shattered when it is open source and free.
"TD Cowen analyst Michael Elias has explained to clients through multiple notes over the last month that Microsoft has scaled back on data center projects in the U.S. and Europe. This development is unsurprising, as readers have been aware of the emerging risks posed by the cheaper and more efficient Chinese DeepSeek (as noted on Jan. 27), prompting us to question whether AI data capacity will be achieved sooner than initially anticipated.
Another worrying sign for the AI bubble—or rather, a continuation of Elias' reporting on Microsoft scaling back data center projects—comes from Bloomberg, which provides additional color on MSFT supposedly halting data center construction sites in Indonesia, the UK, Australia, Illinois, North Dakota, and Wisconsin.
Here's more from the report, citing people familiar with talks (list courtesy of Bloomberg):
Microsoft recently withdrew from negotiations to lease space between London and Cambridge in the UK at a site being marketed for its ability to host advanced Nvidia chips, according to people familiar with the talks, who requested anonymity to discuss a private matter.
The company has also halted negotiations for data center space at a site near Chicago, according to a person familiar with the talks.
In some cases, Microsoft is delaying construction. For example, it has paused work on parts of a data center campus it owns about an hour outside of Jakarta, according to people familiar with the situation.
Microsoft also has put on hold some planned expansion at a site in Mount Pleasant, Wisconsin, part of a complex visited by then-President Joe Biden, according to another person.
In London, Microsoft was negotiating to lease space at Ada Infrastructure's 210-megawatt Docklands data center but has held off on committing to the project, according to people familiar with the matter.
Elias first raised concerns about Microsoft scaling back on AI computing capacity in a note on Feb. 24, in which he stated that Microsoft was terminating AI data center leases. This was followed by a separate note last week, in which the analyst reported that Microsoft had walked away from data center projects in the U.S. and Europe, amounting to a capacity of approximately 2 gigawatts of electricity.
"We continue to believe the lease cancellations and deferrals of capacity points to data center oversupply relative to its current demand forecast," Elias said last week.
News of the cheaper Chinese DeepSeek—a response to OpenAI's ChatGPT—in late January, which is allegedly 40–50 times more efficient than other large language models, had Goldman's Rich Privorotsky at the time proposing a new theme that spelled bad news for the AI bubble: "If you can do more with less, it naturally raises the question of whether so much capacity is necessary."
"TD Cowen analyst Michael Elias has explained to clients through multiple notes over the last month that Microsoft has scaled back on data center projects in the U.S. and Europe. This development is unsurprising, as readers have been aware of the emerging risks posed by the cheaper and more efficient Chinese DeepSeek (as noted on Jan. 27), prompting us to question whether AI data capacity will be achieved sooner than initially anticipated.
Another worrying sign for the AI bubble—or rather, a continuation of Elias' reporting on Microsoft scaling back data center projects—comes from Bloomberg, which provides additional color on MSFT supposedly halting data center construction sites in Indonesia, the UK, Australia, Illinois, North Dakota, and Wisconsin.
Here's more from the report, citing people familiar with talks (list courtesy of Bloomberg):
Microsoft recently withdrew from negotiations to lease space between London and Cambridge in the UK at a site being marketed for its ability to host advanced Nvidia chips, according to people familiar with the talks, who requested anonymity to discuss a private matter.
The company has also halted negotiations for data center space at a site near Chicago, according to a person familiar with the talks.
In some cases, Microsoft is delaying construction. For example, it has paused work on parts of a data center campus it owns about an hour outside of Jakarta, according to people familiar with the situation.
Microsoft also has put on hold some planned expansion at a site in Mount Pleasant, Wisconsin, part of a complex visited by then-President Joe Biden, according to another person.
In London, Microsoft was negotiating to lease space at Ada Infrastructure's 210-megawatt Docklands data center but has held off on committing to the project, according to people familiar with the matter.
Elias first raised concerns about Microsoft scaling back on AI computing capacity in a note on Feb. 24, in which he stated that Microsoft was terminating AI data center leases. This was followed by a separate note last week, in which the analyst reported that Microsoft had walked away from data center projects in the U.S. and Europe, amounting to a capacity of approximately 2 gigawatts of electricity.
"We continue to believe the lease cancellations and deferrals of capacity points to data center oversupply relative to its current demand forecast," Elias said last week.
News of the cheaper Chinese DeepSeek—a response to OpenAI's ChatGPT—in late January, which is allegedly 40–50 times more efficient than other large language models, had Goldman's Rich Privorotsky at the time proposing a new theme that spelled bad news for the AI bubble: "If you can do more with less, it naturally raises the question of whether so much capacity is necessary."
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Posted on 4/4/25 at 1:57 pm to John Barron
Not a single thing what you said is the truth about the AI bubble popping
Microsoft wants nothing to do with AI - just like how they don’t care about their search engine Bing.
Microsoft makes their money off their windows OS and XBOX. They don’t care about spending billions of dollars developing an AI when they can just team up with Chat GPT to provide their AI feature on their products
So sick of you fricking liberals just making shite up with your fake made up gotcha headlines.
Microsoft wants nothing to do with AI - just like how they don’t care about their search engine Bing.
Microsoft makes their money off their windows OS and XBOX. They don’t care about spending billions of dollars developing an AI when they can just team up with Chat GPT to provide their AI feature on their products
So sick of you fricking liberals just making shite up with your fake made up gotcha headlines.
This post was edited on 4/4/25 at 2:00 pm
Posted on 4/4/25 at 2:02 pm to John Barron
quote:
Deepseek proved you did not need the Capex these companies were spending.
Yes they did, they heavily utilized openAI data, used way more GPUs than claimed, it was over fitted on known benchmarks, and the mixed expert model has proved... mixed.
You yourself use Grok.
Nothing you said here is remotely true.
Posted on 4/4/25 at 2:19 pm to FLTech
quote:
Microsoft wants nothing to do with AI - just like how they don’t care about their search engine Bing.
That isn't exactly true. Just last year, Microsoft was planning to spend $80billion in 2025 on AI data center projects.
Posted on 4/4/25 at 2:22 pm to FLTech
quote:
Microsoft wants nothing to do with AI
This couldn’t be more wrong.
Posted on 4/4/25 at 2:40 pm to John Barron
quote:
Deepseek proved you did not need the Capex these companies were spending.
Just because you keep saying this, does not make it true. Deepseek has been proven to be a Deepfake already.
Posted on 4/4/25 at 2:44 pm to DarthRebel
Ai bubble popping is just a catch phrase with no meaning behind it.
There is no ai bubble
There is no pop
The media Hype on tariffs just creates a FOMO on the drop from tariffs, the drop has happened now the stocks will drift back up based on their fundamentals…
There is no ai bubble
There is no pop
The media Hype on tariffs just creates a FOMO on the drop from tariffs, the drop has happened now the stocks will drift back up based on their fundamentals…
Posted on 4/4/25 at 4:31 pm to FieldEngineer
No it’s not. They would rather use OpenAI (Chat GPT) as their AI source and pocket the other hundreds of billions it would cost for them to develop their own AI - hence MS Copilot has been an utter failure and disaster
Microsoft is not AI people. They have to have AI for their search engine product which they can piggyback off OpenAI (Chat GPT) because they don’t want to invest in a lot of money for their bing search engine because that is also a complete failure.
Microsoft is not AI people. They have to have AI for their search engine product which they can piggyback off OpenAI (Chat GPT) because they don’t want to invest in a lot of money for their bing search engine because that is also a complete failure.
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