Microsoft to invest $80 billion in AI-driven data centers in fiscal 2025

Microsoft has unveiled plans to invest approximately $80 billion (around Rs. 6,86,200 crore) in fiscal 2025 to expand its data center network, focusing on infrastructure for training artificial intelligence (AI) models and deploying AI-powered cloud applications.

The tech giant disclosed its investment plans in a blog post, highlighting the growing demand for advanced data centers fueled by the surge in AI integration across industries since the launch of OpenAI's ChatGPT in 2022. These centers are critical for providing the computational power needed to train AI models by linking thousands of specialised chips in clusters.

Microsoft's capital expenditure for the first quarter of fiscal 2025 has already reached $20 billion (roughly Rs. 1,71,541 crore), a 5.3% increase compared to the same period last year. Analysts project that the company’s total capital expenditure for the fiscal year, including capital leases, could reach $84.24 billion (around Rs. 7,20,475 crore), according to Visible Alpha.

The investment underscores Microsoft's aggressive push to lead the AI race, bolstered by its exclusive partnership with OpenAI, the creator of ChatGPT. As OpenAI’s primary backer, Microsoft has positioned itself as a key player in developing AI-driven tools and solutions.

“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,” said Brad Smith, Microsoft’s Vice Chair and President. Smith also revealed that more than half of the $80 billion investment will be allocated to projects within the United States.

With billions already directed toward enhancing its AI infrastructure, Microsoft is expanding its network of data centers to meet the rising computational demands of AI applications. The initiative reflects the company’s long-term vision to dominate the rapidly evolving AI landscape.