Microsoft Will Spend $80b On AI-Enabled Data Centers

Uploaded on 2025-01-10 in FREE TO VIEW, TECHNOLOGY--Developments, TECHNOLOGY-Key Areas-Artificial Intelligence

Microsoft may spend up to $80 billion in 2025 on the construction of data centres that can handle Artificial Intelligence (AI) workloads, the company said in a recent blog post. Over 50% of the expected AI infrastructure spending will take place in the US, Microsoft Vice Chair and President Brad Smith wrote.

With such a major investment Microsoft is demonstrating its belief that AI is poised to become a world-changing technology, with the potential to drive innovation and boost productivity in every sector of the economy.

“Today, the United States leads the global AI race thanks to the investment of private capital and innovations by American companies of all sizes, from dynamic start-ups to well-established enterprises,” Smith said. “At Microsoft, we’ve seen this first-hand through our partnership with OpenAI, from rising firms such as Anthropic and XAI, and our own AI-enabled software platforms and applications.”

Several top-tier technology companies are rushing to spend billions on Nvidia graphics processing units for training and running AI models. OpenAI’s ChatGPT assistant, which launched in late 2022, started the AI race for companies to deliver their own generative AI capabilities.

Having already invested more than $13 Billion in OpenAI, Microsoft provides cloud infrastructure to the startup and has incorporated its models into Windows, Teams and other products.

Microsoft reported $20 billion in capital expenditures and assets acquired under finance leases worldwide, with $14.9 billion spent on property and equipment, in the first quarter of fiscal 2025 and capital expenditure will increase sequentially in the second quarter of the year.

Financial analysts expect to see $63.2 billion spent on property and equipment in fiscal 2025, implying 42% year-over-year growth. Microsoft’s revenue from Azure and other cloud services increased 33% in the fiscal first quarter.

Smith also called on President-elect Donald Trump’s incoming administration to protect the country’s leadership in AI through education and the promotion of US AI technologies abroad. “China is starting to offer developing countries subsidised access to scarce chips, and it’s promising to build local AI data centers,” Smith wrote.

“The Chinese wisely recognise that if a country standardises on China’s AI platform, it likely will continue to rely on that platform in the future...

...The best response for the United States is not to complain about the competition, but to ensure we win the race ahead. This will require that we move quickly and effectively to promote American AI as a superior alternative.” Smith added.

Image: Ideogram

You Might Also Read:

China Aims to Compete With OpenAI, Gemini & Grok:

If you like this website and use the comprehensive 7,000-plus service supplier Directory, you can get unrestricted access, including the exclusive in-depth Directors Report series, by signing up for a Premium Subscription.