Microsoft plans to invest $80 billion in data centers for AI in fiscal year 2025

Microsoft has allocated $80 billion for the construction of data centers designed to support artificial intelligence (AI) workloads in fiscal year 2025. The company plans to expand its infrastructure to handle AI model training and the deployment of AI and cloud-based applications globally. According to Brad Smith, Microsoft’s Vice Chair and President, more than half of this investment will be focused in the United States. The tech giant’s fiscal year 2025 ends in June.

Smith emphasized the transformative potential of AI, noting that it is set to revolutionize industries and boost productivity across the global economy. He stated, “AI promises to drive innovation and enhance efficiency in every sector,” and highlighted that the United States is poised to lead this technological revolution, especially through international partnerships and leveraging its strengths.

Earlier in 2024, Microsoft and OpenAI were reportedly discussing the construction of a data center for an AI supercomputer, named Stargate, which would cost over $100 billion. This facility would be central to the growing demand for AI-powered services. Interestingly, Microsoft later referred to OpenAI as a “competitor” in an SEC filing, marking a shift in their relationship.

The increasing energy demands of AI are expected to put significant pressure on data centers. As AI models require immense computing power, the energy consumption is expected to surge in the coming years. This could lead to power shortages for data centers, raising concerns about the sustainability of such rapid technological growth. Microsoft’s large-scale investment in data centers is a response to these challenges, aiming to meet the rising demand for AI services while positioning the company as a leader in the AI industry.