Satellite images point to possible delays behind Microsoft’s $5 billion AI spending shortfall

Microsoft spent $5 billion less than expected on AI last quarter, according to Business Insider, and the company cut its annual capital expenditure forecast by the same amount. CFO Amy Hood said delays by third-party cloud providers contributed to the lower-than-expected AI infrastructure spending. The report says the news sent neocloud stocks tumbling as investors weighed whether younger cloud companies can meet large-scale commitments.

Microsoft did not name the providers behind the delays, but satellite analysis from research firm Aterio pointed to two projects tied to neoclouds IREN and Nebius. In Texas, IREN is building four data centers under a $9.7 billion deal with Microsoft. Aterio said an October 21 satellite flyover showed Horizon 4 was still missing backup power generators and cooling equipment, raising the risk it could miss its scheduled delivery by the end of the year.

IREN previously said equipment shortages delayed Horizon 1, which Microsoft accepted in August. That sequence puts equipment availability and project execution at the center of the AI infrastructure buildout question.

In New Jersey, DataOne is developing a project for Nebius under a $17.4 billion deal with Microsoft. Aterio said roughly 140 megawatts of planned capacity could slip into 2027. The report says the project faced permitting issues for original power generators, then additional approval delays after switching to fuel cells.

Regulators fined DataOne $1 million in September for operating generators without required permits. DataOne and IREN declined to comment to Business Insider, while Nebius did not respond to a request for comment.

The reported delays point to a broader constraint for AI data centers: getting enough reliable power and approvals on time. Business Insider noted that Microsoft axed a deal with another neocloud, Nscale, in October because of power-supply delays. Research firm Currence estimates that 30% to 50% of planned data center capacity initially scheduled to come online this year could be pushed into 2027 or later because of electricity shortages and construction issues.

A Microsoft spokesperson said the company’s infrastructure approach is built on “flexibility and optionality,” combining its own data centers with leased facilities and third-party providers. The key takeaway for readers: AI demand is not only a chip and software story; it is also a power, permitting, and construction story.