Microsoft Corp. (MSFT) spent $5 billion less than expected on AI infrastructure last quarter, and satellite analysis reportedly points to construction and permitting delays at two third-party data center projects.

Microsoft disclosed the shortfall during its quarterly earnings call last month. CFO Amy Hood attributed the gap to delays involving outside cloud providers, without identifying them.

Research firm Aterio identified projects connected to IREN Ltd. (IREN) as a possible contributor. In Texas, IREN is developing four data centers under a $9.7 billion Microsoft agreement. Aterio's Oct. 21 satellite review found the Horizon 4 facility without backup generators and cooling equipment, raising questions about its planned year-end delivery.

Aterio captured optical and thermal images of IREN's Childress campus on Oct. 21 and compared them with satellite imagery from May, June and July to assess construction progress and potential implications for delivery timelines.

IREN previously said equipment shortages delayed Horizon 1, which Microsoft accepted in August, Business Insider reported.

Meanwhile, in New Jersey, DataOne is reportedly developing a Nebius Group N.V. (NBIS) project under a separate $17.4 billion Microsoft agreement. Aterio analyst Daud Shiraz told Business Insider that about 140 megawatts from the project could move into 2027 after generator-permit problems and additional fuel-cell approval delays. Regulators also fined DataOne $1 million in September.

Notably, Microsoft also scrapped its planned 50-megawatt U.K. data center deal with Nscale in October, due to power supply uncertainty, with grid access reportedly delayed until the 2030s. The site was expected to house 23,000 Nvidia Corp. (NVDA) GB300 chips.

Microsoft, IREN and Nebius did not immediately respond to MarketDash's request for comments.

AI Data Center Buildout Faces New Risks

Microsoft and Alphabet Inc. (GOOGL) (GOOG) reported quarterly capital spending below analyst expectations, with Microsoft posting $45.2 billion versus $50.7 billion expected and Alphabet spending $51.36 billion against $55.09 billion. The shortfalls have raised concerns about whether hyperscalers can sustain AI infrastructure spending, potentially affecting demand for neocloud providers.

On Wednesday, technology analyst Dan Ives said that political changes after the Democratic midterm wins could slow the U.S. data center buildout, estimating 10% of planned construction would not proceed.

Strategist Jim Bianco said Democrat Gina Hinojosa's Texas gubernatorial win could affect data-center expansion, as the state is expected to host 25% of new U.S. data centers through 2030. He flagged uncertainty over whether the construction moratorium imposed by Republican Gov. Greg Abbott will remain in place, despite Republicans retaining control of both legislative chambers.

Price Action: Year-to-date, Microsoft stock climbed 14.92%, according to market data. The stock dipped about 0.23% to $554.50 pre-market on Thursday.