Microsoft ends Oracle deal, Google takes over Crusoe site
Microsoft declined to renew a compute rental contract with Oracle, citing aging hardware, while Google assumed control of a Wyoming data center project from Crusoe. These moves indicate that access to power and latest-generation GPUs is becoming the primary driver of infrastructure value.
Microsoft has declined to renew a compute rental contract with Oracle that has been in place since 2023. The company cited that aging A100 chips no longer suited its needs, marking the first clear evidence of older chips hitting the end of their depreciation cycle. Microsoft is also rethinking its agreements with NeoCloud providers due to delays and rising costs, following its previous withdrawal from a UK data center project with N-Scale.
In a parallel development, Google has taken over a troubled data center site in Wyoming from Crusoe. Google plans to invest $17 billion into the development after Crusoe struggled with energy and construction delays. The project was initially planned to scale to 10 gigawatts, and Google had been pressuring Crusoe to leave since summer. Crusoe continues work on a separate build-out in Amarillo, Texas, and is developing OpenAI's campus in Aveline, Texas.
These strategic shifts signal that data centers with established power connections and the latest GPUs are now more valuable than those still under construction. There is no clear evidence that these decisions are driven by a drop in AI demand, but rather by a recalibration of asset value based on hardware currency and operational readiness.