Microsoft announced in its blog post that it plans to invest $80 billion in construction of data centers to operate artificial intelligence in fiscal year 2025.
Brad Smith, Vice Chair and President of Microsoft wrote that more than half of the planned spending on AI data centers would be within the United States.
Microsoft’s fiscal year started in July of the previous year and ended in June.
Many leading tech companies are scrambling for Nvidia’s graphic processor units to train and operate AI models. OpenAI triggered the AI race after the launch of its ChatGPT assistant. Microsoft, which invested $13 billion in OpenAI, has provided the startup with a cloud infrastructure and incorporated its AI models into its own products, such as Windows, Team, and more.
Amy Hood, Microsoft’s Chief Financial Officer, said in October that Microsoft has reported $20 billion in capital expenditures and assets acquired under finance leases worldwide, $14.9 billion of which were spent on property and equipment in 1Q of FY25. Capital Expenditures in 2Q of FY25 are expected to increase sequentially.
Visual Alpha’s analytics were forecasting an additional $63.2 billion in property and equipment in FY25, suggesting 12% year-on-year growth.
Revenue from Microsoft’s Azure and other cloud services has increased 33% in the first quarter of the fiscal year, 12% of which were from AI services.
Smith has called for the protection of the U.S. leads in AI innovation through education and promotion of U.S. AI in foreign countries from the upcoming administration under President Donald Trump.
He wrote in a remark that China is starting to offer its AI chips and promised to build local AI data centers in developing countries and that China has recognized that if a country standardizes its AI on China’s platform, they would continue to rely on the said platform moving forward.
The U.S. should stop complaining about China’s encroachment and should start promoting its AI as a superior alternative, Smith added.
Last year, Microsoft announced an investment in Thailand’s data center with an estimated capital of around $1 billion. The data center will be located in the Eastern Economic Corridor (EEC).
Microsoft’s investment in Thailand is part of its Asia Pacific expansion strategy, which aims to: Take advantage of the AI era, Reduce geopolitical risk, and Help Thai organizations grow and make an impact.
