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Microsoft is canceling data center leases, according to a Wall Street analyst.

The artificial intelligence industry is experiencing another TD Cowen shock.
The whole spectrum of companies connected to artificial intelligence — the companies that design the chips, that supply the power, that make the generation equipment — shuddered Wednesday when the brokerage released another note from analysts pointing to evidence that Microsoft was giving up on its data center leases.
“Microsoft has both (1) walked away from +2GW of capacity in both the U.S. and Europe in the last six months that was in process to be leased, and (2) has both deferred and canceled existing data center leases in both the U.S. and Europe in the last month,” the analysts wrote.
Microsoft is one of the biggest players in the artificial intelligence industry, with its near-$14 billion investment in OpenAI and a commitment to spend $80 billion on data center capacity this year.
The company is pulling back, the TD Cowen analysts said, because it had decided not to support incremental increases in training workloads for OpenAI models. Shares in Nvidia, the chip designer that’s become one of the most valuable companies in the world on the back of optimism about artificial intelligence, are down 7% since market close Tuesday, while shares in the power companies Vistra and Constellation are down 9% and 7% respectively. GE Vernova, which makes turbines for gas-fired power plants, is down 9%.
Much of the power industry saw huge increases in their stock prices in 2024, as investors bet on increased demand for electricity from data centers, manufacturing, and electrification. But 2025 so far has been a year of mild expectations.
In February, Cowen analysts issued a similar note warning that Microsoft was pulling back on some of its data center leases. And in January, of course, many of the AI and energy stocks that had been soaring 2024 dropped when the Chinese artificial intelligence company DeepSeek released an open source model comparable in performance to the state of the art in the United States but that required far less computing power to train.
The Cowen analysts were hardly doomy about AI and data center construction, writing that Google and Meta may be “backfilling” the capacity left behind by Microsoft as they seek to expand their own data center footprints.
But the case for across the board optimism may be slightly dimming across the sector. CoreWeave, which buys Nvidia chips and operates data centers, has had to reduce the amount of money its seeking to raise in its planned initial public offering to $1.5 billion, from the over $4 billion it was looking to get from investors earlier in the IPO process, Bloomberg reported. Nvidia, an investor in CoreWeave and its most important supplier, will be “anchoring” the IPO, kicking in $250 million.
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The lost federal grants represent about half the organization’s budget.
The Interstate Renewable Energy Council, a decades-old nonprofit that provides technical expertise to cities across the country building out renewable clean energy projects, issued a dramatic plea for private donations in order to stay afloat after it says federal funding was suddenly slashed by the Trump administration.
IREC’s executive director Chris Nichols said in an email to all of the organization’s supporters that it has “already been forced to lay off many of our high-performing staff members” after millions of federal dollars to three of its programs were eliminated in the Trump administration’s shutdown-related funding cuts last week. Nichols said the administration nixed the funding simply because the nonprofit’s corporation was registered in New York, and without regard for IREC’s work with countless cities and towns in Republican-led states. (Look no further than this map of local governments who receive the program’s zero-cost solar siting policy assistance to see just how politically diverse the recipients are.)
“Urgent: IREC Needs You Now,” begins Nichols’ email, which was also posted to the organization’s website in full. “I need to be blunt: IREC, our mission, and the clean energy progress we lead is under assault.”
In an interview this afternoon, Nichols told me the DOE funding added up to at least $8 million and was set to be doled out over multiple years. She said the organization laid off eight employees — roughly a third of the organization’s small staff of fewer than two-dozen people — because the money lost for this year represented about half of IREC’s budget. She said this came after the organization also lost more than $4 million in competitive grant funding for apprenticeship training from the Labor Department because the work “didn’t align with the administration’s priorities.”
Nichols said the renewable energy sector was losing the crucial “glue” that holds a lot of the energy transition together in the funding cuts. “I’m worried about the next generation,” she told me. “Electricity is going to be the new housing [shortage].”
IREC has been a leading resource for the entire solar and transmission industry since 1982, providing training assistance and independent analysis of the sector’s performance, and develops stuff like model interconnection standards and best practices for permitting energy storage deployment best practices. The organization boasts having worked on developing renewable energy and training local workforces in more than 35 states. In 2021, it absorbed another nonprofit, The Solar Foundation, which has put together the widely used annual Solar Jobs Census since 2010.
In other words, this isn’t something new facing a potentially fatal funding crisis — this is the sort of bedrock institutional know-how that will take a long time to rebuild should it disappear.
To be sure, IREC’s work has received some private financing — as demonstrated by its solar-centric sponsorships page — but it has also relied on funding from Energy Department grants, some of which were identified by congressional Democrats as included in DOE’s slash spree last week. In addition, IREC has previously received funding from the Labor Department and National Labs, the status of which is now unclear.
It would have delivered a gargantuan 6.2 gigawatts of power.
The Bureau of Land Management says the largest solar project in Nevada has been canceled amidst the Trump administration’s federal permitting freeze.
Esmeralda 7 was supposed to produce a gargantuan 6.2 gigawatts of power – equal to nearly all the power supplied to southern Nevada by the state’s primary public utility. It would do so with a sprawling web of solar panels and batteries across the western Nevada desert. Backed by NextEra Energy, Invenergy, ConnectGen and other renewables developers, the project was moving forward at a relatively smooth pace under the Biden administration, albeit with significant concerns raised by environmentalists about its impacts on wildlife and fauna. And Esmeralda 7 even received a rare procedural win in the early days of the Trump administration when the Bureau of Land Management released the draft environmental impact statement for the project.
When Esmeralda 7’s environmental review was released, BLM said the record of decision would arrive in July. But that never happened. Instead, Donald Trump issued an executive order directing the Departments of the Treasury and the Interior to review their treatment of wind and solar, part of a deal with conservative hardliners in Congress to pass his tax megabill — the same bill that also effectively repealed the Inflation Reduction Act’s renewable electricity tax credits. This led to a series of subsequent orders by Interior Secretary Doug Burgum that effectively froze all federal permitting decisions for solar energy.
Flash forward to today, when BLM quietly updated its website for Esmeralda 7 permitting to explicitly say the project’s status is “cancelled.” Normally when the agency says this, it means developers pulled the plug.
I’ve reached out to some of the companies behind Esmeralda 7. A NextEra spokesperson provided me a statement from the company after this story’s publication saying it is “in the early stage of development” with its portion of the Esmeralda 7 mega-project, and the company is “committed to pursuing our project’s comprehensive environmental analysis by working closely with the Bureau of Land Management.”
This article was updated after publication to include a statement from NextEra.
A judge has lifted the administration’s stop-work order against Revolution Wind.
A federal court has lifted the Trump administration’s order to halt construction on the Revolution Wind farm off the coast of New England. The decision marks the renewables industry’s first major legal victory against a federal war on offshore wind.
The Interior Department ordered Orsted — the Danish company developing Revolution Wind — to halt construction of Revolution Wind on August 22, asserting in a one-page letter that it was “seeking to address concerns related to the protection of national security interests of the United States and prevention of interference with reasonable uses of the exclusive economic zone, the high seas, and the territorial seas.”
In a two-page ruling issued Monday, U.S. District Judge Royce Lamberth found that Orsted would presumably win its legal challenge against the stop work order, and that the company is “likely to suffer irreparable harm in the absence of an injunction,” which led him to lift the dictate from the Trump administration.
Orsted previously claimed in legal filings that delays from the stop work order could put the entire project in jeopardy by pushing its timeline beyond the terms of existing power purchase agreements, and that the company installing cable for the project only had a few months left to work on Revolution Wind before it had to move onto other client obligations through mid-2028. The company has also argued that the Trump administration is deliberately mischaracterizing discussions between the federal government and the company that took place before the project was fully approved.
It’s still unclear at this moment whether the Trump administration will appeal the decision. We’re still waiting on the outcome of a separate legal challenge brought by Democrat-controlled states against Trump’s anti-wind Day One executive order.