Microsoft On Track to Spend $80B to Build AI Data Centers in FY2025

On 3 January 2025, based on the Microsoft New Year 2025 Greetings posted by its Vice-Chair and President Brad Smith on the Official Microsoft Blog, we have learnt that the Seattle-based tech giant is on track to invest USD 80 billion to build out AI-enabled data centers around the world.

More than half the spending will be in its home country of USA, while the other half will be spent overseas to ensure better geographical coverage and disaster recovery management. Among many candidate countries, UAE, Kenya and India appear well-placed to benefit the most from the #FDI.

“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 budget for AI data centers in FY2025 will exceed Microsoft’s CAPEX in FY2024, which reached USD 53 billion. Microsoft President Smith underscored the fierce competition between the US and China over #AI as one of the key reasons for the bold move.

“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 became famous for ChatGPT. With generative 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 capabilities will facilitate the integration of AI into various smart devices, such televisions, fridges, microwaves, which will be able to interact seamlessly with humans.

Brad Smith believes America’s technological dominance rests on three pillars, viz.:

• Invest in homegrown AI technologies and related infrastructure
• Implement AI skilling programs to encourage AI adoption and provide career opportunities
• Export and make available AI technologies to US allies

President Smith considers that the Golden Age of AI for US has arrived and Microsoft is seizing it with both hands. He underlined that the success of the AI strategy will also depend on building up a broad and deep technology ecosystem within the US, from chip manufacturing, software creation and data center roll-out.