Microsoft On Track to Spend $80B to Build AI Data Centers in FY2025
On 3 January 2025, as part of the new year’s greeting by Vice-Chair and President of Microsoft Brad Smith posted on the official blog of Microsoft, we have learnt that the Seattle-based tech giant is on track to invest approximately USD 80 billion to build out AI-enabled data centers.
More than half the spending will be in the home country with the other half being spent across the world for geographical coverage and disaster recovery management. Among many countries, UAE and Kenya stand to benefit the most from the overseas investment.
“Not since the invention of electricity has the United States had the opportunity it has today to harness new technology to invigorate the nation’s economy. In many ways, artificial intelligence is the electricity of our age, and the next four years can build a foundation for America’s economic success for the next quarter century.”
Microsof Viice-Chair and President Brad Smith
The investment amount of for AI data centers in FY2025 far exceeds the CAPEX in FY2024, which is estimated at USD 53 billion. President Smith underscored the competition with China over AI as one of the key reasons for the bold investment plan.
“The rapid development of China’s AI sector has heightened competition between American and Chinese AI, with much of this likely to play out during the next four years in international markets around the world.”
Microsoft Vice-Chair and President Brad Smith
In the same line of thought, Microsoft poured USD 14 billion into AI startup OpenAI which become famous for ChatGPT. With gnerative AI getting more sophisticated day by day, AI skills will form the backbone of American jobs in the future.
At the same time, Microsoft is developing its own generative AI engine, codenamed Copilot. Natural language interaction will facilitate the integration of AI into various smart devices such TV, fridges, microwaves which will be able to interact naturally with humans.
Brad Smith believes American’s technology dominance rest on three pillars as follows:
- Invest in homegrown AI technology and related infrastructure
- Implement AI skilling programs to encourage AI adoption and provide career opportunities
- Exporting AI technologies t US allies
President Smith considers that the Golden Age of AI for US has arrived and Microsoft is seizing it with both hands. He also noted the success of the AI strategy will also depend on building up a broad technology ecosystem within the US, from chip manufacturing, software creation and building of data centers.