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Microsoft plans to invest $80 billion in data center expansion this fiscal year, driven by the increasing demand for artificial intelligence (AI). The investment will focus on building new data centers and procuring high-powered chips necessary for AI processing. Microsoft President Brad Smith highlighted the crucial role of infrastructure in AI advancement and urged the incoming Trump administration to adopt a pragmatic approach to AI regulations, balancing security concerns with fostering innovation.
Microsoft plans to spend $80 billion this fiscal year building out data centres, underscoring the intense capital requirements of artificial intelligence. More than half of this projected spending through June 2025 will be in the US, Microsoft President Brad Smith wrote in a blog post Friday.
Recent AI progress is thanks to “large-scale infrastructure investments that serve as the essential foundation of AI innovation and use,” Smith wrote. Cloud infrastructure providers like Microsoft and Amazon.com Inc. have been racing to expand computing capacity by constructing new data centres. In the previous fiscal year ending in June 2024, Microsoft spent more than $50 billion on capital expenditures, the vast majority related to server farm construction fueled by demand for artificial intelligence services. Smith also cautioned the incoming Trump administration against “heavy-handed regulations” related to AI. “The most important US public-policy priority should be to ensure that the US private sector can continue to advance with the wind at its back,” Smith wrote. The country needs “a pragmatic export control policy that balances strong security protection for AI components in trusted data centres with an ability for US companies to expand rapidly and provide a reliable source of supply to the many countries that are American allies and friends” Smith wrote. Much of the spending on data centres goes toward high-powered chips from companies including Nvidia Corp. and infrastructure providers such as Dell Technologies Inc. The massive AI-enabled server farms require lots of power, which prompted Microsoft to strike a deal to reopen a reactor at theAmazon and Google have also signed nuclear power agreements.
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