Microsoft Vice Chairman and President Brad Smith attends the first day of the Web Summit in Lisbon, Portugal, November 12, 2024. The world’s largest technology conference this year has 71,528 participants from 153 countries and 3,050 companies with AI becoming the most represented industry. (Photo by Rita Franca/NurPhoto via Getty Images)
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Microsoft plans to spend $80 billion in fiscal 2025 to build data centers capable of handling artificial intelligence workloads, the company said in a blog post Friday.
More than half of expected spending on AI infrastructure will occur in the US, wrote Microsoft Vice Chairman and President Brad Smith. Microsoft’s 2025 fiscal year ends in June.
“Today, the United States leads the global AI race, thanks to the investment of private capital and innovation from American companies of all sizes, from dynamic startups to established companies,” said Smith. “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI, emerging companies like Anthropic and xAI, and our own AI-powered software platforms and applications.”
Several top-tier tech companies are rushing to spend billions Nvidia Graphics processing units for training and running AI models. The rapid spread of OpenAI’s ChatGPT assistant, launched in late 2022, sparked the AI race for companies to provide their own generative AI capabilities. After investing over $13 billion in OpenAI, Microsoft is providing the startup with cloud infrastructure and has integrated the startup’s models into Windows, Teams and other products.
Microsoft reported $20 billion in capital expenditures and assets acquired under capital leases worldwide in the first quarter of fiscal 2025, including $14.9 billion for property, plant and equipment. Capital spending will increase sequentially in the second fiscal quarter, Microsoft Chief Financial Officer Amy Hood said in October.
Smith called on the new administration of President-elect Donald Trump to protect the country’s leadership in AI through education and the promotion of U.S. AI technologies abroad.
“China is beginning to offer developing countries subsidized access to scarce chips, and it is promising to build local AI data centers,” Smith wrote. “The Chinese are wisely aware that a country that standardizes China’s AI platform is likely to 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 that we win the race before us. To do this, we must move quickly and effectively to promote American AI as a superior alternative.”
REGARD: Microsoft plans to spend $80 billion on expanding AI this year
