Microsoft To Spend $80bn On AI Infrastructure This Year

Matthew Broersma,
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A Microsoft data centre. Datacentre

Microsoft planning to spend $80bn on data centres for AI and other cloud applications this fiscal year, as AI race heats up

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Microsoft is planning to spend $80 billion (£64bn) on data centres for artificial intelligence (AI) training and inference and other cloud applications this fiscal year, the company said.

The company said more than half of the investments this fiscal year, which ends on 30 June, would be in the United States.

“It’s clear that artificial intelligence is poised to become a world-changing GPT [General-Purpose Technology],” said Microsoft president Brad Smith in a blog post.

“AI promises to drive innovation and boost productivity in every sector of the economy.”

A computer screen displays lines of code. Image credit: Unsplash
Image credit: Unsplash

‘Doubling down’

He said the United States is poised to stand “at the forefront” of the new technology wave, “especially if it doubles down on its strengths and effectively partners internationally”.

He noted heavy US private capital investments into the sector that have made the US the leader in the “global AI race” and Microsoft’s own partnerships with ChatGPT developer OpenAI as well as that start-up’s competitors Anthropic and xAI.

Smith said the incoming US administration could “build on the foundational ideas set for AI policy” in president-elect Donald Trump’s first term, including his 2019 executive order on maintaining the country’s AI leadership.

The US’ “technology success” requires a partnership among government, private sector and educational and non-profit groups, Smith argued.

In October the firm’s chief executive Satya Nadella said the company was having difficulty keeping up with strong demand for AI infrastructure due to delays from outside suppliers, meaning Microsoft wouldn’t be able to meet demand in the second quarter.

AI race

Microsoft’s shares dipped 4 percent on the news, as investors showed disappointment that the company’s revenues weren’t expected to grow faster.

Nadella said he felt “pretty good” that going into the second half of the fiscal year “some of that supply-demand will match up”.

The US has been widening its lead over China in AI investment, Stanford University researchers said in November, even though Chinese spending on AI infrastructure also jumped sharply in 2024.