Microsoft Cuts US Data Center Plans, Joins TikTok and Google in AI Push Into Asia

• Microsoft has pulled back on building data centers in the U.S., raising concerns about Big Tech’s potential overestimation of AI demand.
• TikTok, Microsoft, Amazon, and Google are investing billions in Thailand-based data centers.
• Thailand is emerging as an attractive hub for Big Tech.

Microsoft has joined other major technology companies in investing billions into Thailand-based data centers as the company pulls back on building in the U.S.

TikTok, Microsoft, Google, and Amazon have all announced plans to invest heavily in Southeast Asia, leading to a new battleground for AI dominance in the region.

Microsoft Pulls Back on U.S. Data Centers

According to a Friday, Feb. 21, report by TD Cowen, Microsoft has begun canceling leases for data center infrastructure in the U.S.

U.S. brokerage T.D. Cower reported that Microsoft had canceled leases totaling “a couple of hundred megawatts” of capacity.

The brokerage also reported that Microsoft had pulled back on converting signed statements of qualifications, which are agreements that usually lead to formal leases.

TD Cower analysts said its initial reaction to the findings was that Microsoft had potentially oversupplied its position.

TikTok’s Thai Data Center Investment

ByteDance-owned TikTok is investing $3.76 billion in data center infrastructure in Thailand, according to the Thai Board of Investment (BOI) Wednesday, Jan. 29, Reuters reported .

TikTok’s plans come amid a wave of global scrutiny on its Chinese ownership and data protection capabilities.

BOI secretary-general Narit Therdsteerasukdi said the investment marked a “significant step in enhancing Thailand’s digital and AI infrastructure.”

He added that it would help bring Thailand closer to becoming a regional hub.

TikTok’s Singapore unit said the investment would support the activities of affiliated companies through its Thai digital infrastructure project. Operations are due to start in 2026.

Big Tech’s Move to Thailand

TikTok’s move follows a wave of high-profile tech investments in Thailand, as Amazon, Microsoft, and Google commit billions to the region.

In May 2024, Microsoft announced it was launching its first regional data center in Thailand. In January 2025, Amazon Web Services announced it was investing $5 billion in Thailand over 15 years.

In September 2024, Google revealed it was investing $1 billion in Thailand to build a data center and cloud region.

The investment looked to meet the increasing demand for cloud services and support AI adoption in Southeast Asia.

A Deloitte study projected that this investment could contribute approximately $4 billion to Thailand’s GDP by 2029 and create around 14,000 jobs annually between 2025 and 2029.

“Google’s investment in its data center and cloud region in Chonburi and Bangkok, respectively, coupled with growing Thai expertise in cloud computing and AI, are perfectly aligned with our national Cloud First Policy,” Paetongtarn Shinawatra, Prime Minister of Thailand, said in a statement .

“This synergy will accelerate the development of innovative digital services and, in turn, unlock economic opportunities and enhance the quality of life for all Thais,” he added.

Why Is Thailand Attracting So Much Investment?

Over the past few years, Thailand has emerged as a leading hub for data center infrastructure.

As more companies in Southeast Asia migrate to the cloud and adopt AI solutions, the demand for local data centers is increasing.

According to a 2023 report by e-Conomy SEA, the country is considered to have the second-largest digital economy in Southeast Asia and is expected to be worth $50 billion by 2025.

In addition, Krit Pimhataivoot, Head of Capital Markets at JLL Thailand, said an abundance of power availability and “attractive incentives from the BOI” are the key factors to Thailand’s data center growth.

Thailand has also introduced a range of tax incentives for global tech companies, including import duty and corporate tax exemptions.

The BOI’s incentives directly reduce set-up costs and regulatory barriers, making Thailand one of the most attractive places for Big Tech to invest in data centers.