Bitcoin (BTC) Mining Stocks Drop After Microsoft Cancels Plans to Invest in New AI Data Centers

Bitcoin (BTC) mining stocks are down after tech giant Microsoft reportedly scrapped plans to invest in new artificial intelligence data centers in the US and Europe

Tech giant Microsoft has reportedly scrapped plans to invest in new artificial intelligence data centers in the US and Europe, citing a potential oversupply, according to a report by Bloomberg on Tuesday.

Following the news, Bitcoin BTCUSD mining stocks came under pressure, with shares of Bitfarms, CleanSpark, Core Scientific, Hut 8, Marathon Digital and Riot dropping between 4% and 12% in tandem.

As investors anticipated the cuts to Microsoft’s data center plans, Benchmark stock analyst Mark Palmer agreed that the move could affect miners. In his view, the share price pullback "appears to be driven more by stagnation in the price of bitcoin than any other factor, potentially combined with investor fatigue settling over the space as mining difficulty remains near record levels."

"The anticipation of Microsoft cutting back on cloud investments could also factor into the share price decline, but this appears to be less of a concern for investors in the aggregate as it was a factor that analysts had been following closely for some time."

The analysis comes as crypto miners are diversifying into AI data-center hosting. For instance, Core Scientific pledged 200 megawatts of hardware capacity to support CoreWeave's artificial intelligence workloads in June.

In August, asset manager VanEck said Bitcoin mining stocks could collectively see a roughly $37 billion bump to market capitalizations if they invest heavily in supporting AI.

However, miners have struggled this year as declining crypto prices are adding pressure to businesses already impacted by April's halving, according to JPMorgan. And now, it seems that demand for AI data centers is also slowing.

Cutting back on compute

On Tuesday, analysts at TD Cowen said that Microsoft had abandoned plans to build several new data centers that would have generated around 2 gigawatts of power, according to Bloomberg.

The analysts attributed Microsoft's pullback to a perceived oversupply of computing capacity for AI models, as well as the tech giant's decision to forgo some planned collaborations with ChatGPT maker OpenAI.

Over the past six months, Microsoft has canceled various data center leases and postponed plans to bring onboard more capacity, according to Bloomberg.

Moreover, anticipation of a pivot by the tech giant to focus on smaller, more modular data centers also appears to be winding down, the report stated.

These modular data centers were designed to be deployed rapidly and scaled according to demand, but it seems that the need for swift expansion has since decreased, according to the analysis.

The investments are expected to slow further in the second half of 2025 as the company finishes $80 billion in planned buildouts and pivots to outfitting existing centers with hardware and equipment, Bloomberg said.