Microsoft betting big on AI data centers—$80B investment this fiscal
What's the story
Microsoft has announced an investment of $80 billion for the fiscal year 2025, to build data centers specifically for artificial intelligence (AI) workloads. The company shared the information in a recent blog post. These state-of-the-art facilities will be AI-enabled, and will act as global hubs to train AI models and deploy both AI and cloud-based applications.
Investment distribution
Majority of investment to be channeled into US
Microsoft's Vice Chairperson and President, Brad Smith, has revealed that more than half of the $80 billion investment will go into projects in the United States. This strategic move is in line with Smith's vision of the US leading the global AI technology wave. He highlighted this in a statement saying, "The United States is poised to stand at the forefront of this new technology wave."
AI supercomputer
Microsoft's collaboration with OpenAI for Stargate project
In April 2024, Microsoft was said to be in talks with OpenAI to build a data center facility. The proposed facility, which would cost over $100 billion, would host an AI supercomputer called Stargate. However, later in the year, Microsoft called the start-up a "competitor" for the first time in an SEC filing.
Energy consumption
AI's growing power demands pose challenges
The growing demand for AI technology is likely to drastically increase electricity consumption in the coming years. This spike could lead to power shortages for data centers, which could be a major hurdle for tech giants such as Microsoft. The company's massive investment in AI-enabled data centers is a strategic move to meet these expected energy requirements and keep their facilities running without interruption.