Microsoft plans to invest $80 billion in fiscal 2025 to build data centers for AI workloads, according to a blog post by Vice Chair and President Brad Smith.
Over half of this spending will occur in the U.S. Microsoft’s fiscal year 2025 ends in June.
“Today, the United States leads the global AI race thanks to the investment of private capital and innovations by American companies of all sizes, from dynamic start-ups to well-established enterprises,” Smith said. “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI, from rising firms such as Anthropic and xAI, and our own AI-enabled software platforms and applications.”
Top tech companies are investing heavily in Nvidia GPUs to support AI model development, spurred by the rapid adoption of OpenAI’s ChatGPT since late 2022.
Microsoft, having invested over $13 billion in OpenAI, provides cloud infrastructure for the startup and integrates its models into products like Windows and Teams.
Microsoft reported $20 billion in capital expenditures and finance leases globally in Q1 of fiscal 2025, including $14.9 billion on property and equipment.
CFO Amy Hood indicated that capital expenditures would rise further in the fiscal second quarter.
Microsoft’s revenue from Azure and other cloud services rose by 33% in the fiscal first quarter, with 12 percentage points attributed to AI services.
Smith urged President-elect Donald Trump’s incoming administration to safeguard the U.S.’s leadership in AI by focusing on education and promoting American AI technologies internationally.
“China is starting to offer developing countries subsidized access to scarce chips, and it’s promising to build local AI data centers,” Smith wrote. “The Chinese wisely recognize that if a country standardizes on China’s AI platform, it likely will continue to rely on that platform in the future.”
He added, “The best response for the United States is not to complain about the competition but to ensure we win the race ahead. This will require that we move quickly and effectively to promote American AI as a superior alternative.”
