Dive Transient:
- Microsoft expects to spend roughly $80 billion on AI-enabled knowledge facilities to coach massive language fashions and deploy AI and cloud-based functions throughout its present fiscal yr, the corporate’s Vice Chair and President Brad Smith mentioned in a Friday weblog publish.
- Greater than half of the investments will likely be within the U.S., in line with Smith. The tech large’s present fiscal yr 2025 runs by June 30.
- AI workloads triggered cloud capability constraints final yr, ratcheting up an ongoing knowledge heart constructing growth. Microsoft responded by almost doubling capital investments to $20 billion within the first quarter of its 2025 fiscal yr, CFO Amy Hood mentioned throughout an October earnings name. “We anticipate capital expenditures to extend on a sequential foundation given our cloud and AI demand alerts,” she added.
Dive Perception:
Cloud infrastructure, AI compute capability and home politics coalesced in Smith’s publish, which laid out a three-pronged plan for U.S. financial success centered round knowledge facilities, upskilling and know-how exports.
“The incoming administration can strengthen these foundational components, constructing on the work from President Trump’s first time period,” Smith mentioned, pointing to the 2019 American AI Initiative. “President Trump and Congress ought to increase on these efforts to assist advancing America’s AI management.”
Microsoft has been rising its Azure public cloud empire at dwelling and overseas.
Along with breaking floor on a $3.3 billion Wisconsin facility final yr, Microsoft launched its first knowledge heart area in Mexico and additional expanded its cloud footprint in France, Germany and Sweden.
“We intend to speculate greater than $35 billion in 14 international locations inside three years to construct trusted and safe AI and cloud knowledge heart infrastructure,” Smith mentioned. “That is a part of a worldwide infrastructure that now reaches 40 international locations.”
In September, the corporate partnered with funding corporations Blackrock, MGX and World Infrastructure Companions to amass $100 billion for knowledge facilities and supporting energy infrastructure.
Microsoft isn’t working in a vacuum. AWS and Google Cloud, the 2 different world cloud giants, are additionally pouring billions into AI infrastructure, driving large development within the knowledge heart market.
Massive tech firms spent $180 billion on knowledge heart expansions and associated infrastructure final yr, in line with Dell’Oro Group analysis. The agency instructed CIO Dive it expects some cooling within the coming months as cloud suppliers consolidate growth plans.
However starvation for AI-optimized compute has solely intensified.
Hyperscalers had been on tempo to deploy over 5 million AI accelerators in 2024, Dell’Oro Group present in its evaluation of third quarter financials.
“Demand for accelerators has been rising at a breakneck tempo because the hyperscalers race to deploy infrastructure for the coaching and inference of huge language fashions,” Baron Fung, senior analysis director at Dell’Oro Group, mentioned within the report.
Microsoft sees its success as depending on a aggressive know-how ecosystem, Smith mentioned within the weblog publish. “This contains our longstanding opponents, chip suppliers, functions firms, techniques integrators, service suppliers, and the thousands and thousands of software program builders who use our merchandise to create custom-made options,” he mentioned.
