The Trial Balance is CFO.com’s weekly preview of stories, stats and events to help you prepare.
Part 1 — Microsoft nearshores data centers and its CEO Satya Nadella questions AI’s value metrics
Microsoft has made major changes to its AI data leasing strategies, according to multiple reports based on findings from a TD Cowen research report. Findings indicate the company has canceled leases for about 200 megawatts of private data center operation capacity in the U.S., paused the conversion of statement qualifications into formal leases in both the U.S. and abroad and reallocated a “considerable portion” of international spending toward U.S. operations — all while still committing to its goal of investing $80 billion in infrastructure development.
The initiatives likely affected by the company’s decisions include projects for AI infrastructure in Poland, India, Italy and Indonesia.
In a recent appearance on The Dwarkesh Podcast, CEO Satya Nadella spoke about his beliefs and the growth challenges of AI. Though the real estate spending initiative decisions were likely in the works before the interview, the timing of the rollout coincides with Nadella’s comments, which reflect a broader discussion on AI’s value and growth challenges by Microsoft and its CEO. While the company’s shift may be influenced by economic and geopolitical factors, Nadella’s remarks highlight the company’s evolving approach to AI’s real-world impact.
In the interview, Nadella argued that AI’s success shouldn’t be measured by technological milestones but by its tangible real-world impact. “Us claiming some [artificial general intelligence] milestone, that’s just nonsensical benchmarking to me,” he said.
“The first thing we all have to do is, [especially when we say] this is the industrial revolution, let’s have that industrial revolution type of growth… the developed world growing at 5%, that’s the real marker,” Nadella said. “The big winners here aren’t going to be the tech companies. The winners are going to be the broader industry that uses this commodity that, by the way, is abundant.”
While Microsoft hasn’t publicly detailed its reasons for the shift, factors such as supply chain risk, government incentives, geopolitical uncertainty and a business-friendly U.S. environment are likely considerations. For CFOs, this is a trend to watch, as technology spending is consistently predicted to increase among finance leaders.
Part 2 — This week
Here’s a list of important market events slated for the week ahead.
Monday, Feb. 24 — None scheduled
Tuesday, Feb. 25
Wednesday, Feb. 26
Thursday, Feb. 27
Friday, Feb. 28
Part 3 — A guide to thrive, Luke Lobster CFO Q&A and Ames v. Ohio
This week, CFO.com will publish a guide to be a thriving CFO (2/25), a Q&A with Luke’s Lobster CFO Steve Song (2/27), an edition of the 6 a.m. CFO series with Ken Stillwell of Pegasystems (2/27), an update on the Supreme Court’s possible precedent setting case Ames v. Ohio, which accuses an employer of discriminatory DEI policies and reverse discrimination (2/28) and more.