Microsoft Reduces Neocloud Partnerships Amid AI Infrastructure Challenges

Microsoft is reportedly reducing its reliance on neocloud providers, focusing instead on expanding its own data center operations. This move comes as the AI market faces mounting pressure from rising borrowing costs, heavy debt, and uncertainty over long-term growth. The company has previously partnered with several neocloud firms, including CoreWeave and Nebius, but is now evaluating which relationships to cut. A Microsoft spokesperson emphasized that its infrastructure strategy is built on flexibility and choice, combining owned data centers with third-party partnerships. The shift reflects a broader trend of caution in the neocloud sector, where many firms are struggling to secure financing and deliver on ambitious AI projects.