Microsoft plans to triple AI data center capacity by 2032
What's the story
Microsoft is planning a major expansion of its computing footprint over the next six years, Bloomberg reported. The tech giant's global data center capacity could grow from the current 12 gigawatts (GW) to around 38 GW by 2032. This would be more than a threefold increase and highlights the scale of infrastructure Microsoft expects it will need as its cloud business and artificial intelligence (AI) operations continue to grow.
AI integration
A significant portion for AI infrastructure
A large chunk of the proposed expansion is likely to be dedicated to AI-specific infrastructure.
Currently, only some 2GW of Microsoft's existing capacity is dedicated to AI-specific chips. However, under its long-term plan, about one-third of the projected 38GW capacity could be allocated for such infrastructure.
Microsoft's cloud business has shown signs of strong demand, with the company issuing a stronger-than-expected forecast for cloud growth in July.
Lease strategy
Microsoft considers new leasing strategy to manage costs
Microsoft has committed to spending heavily on data centers, expecting capital expenditure to hit $50 billion in Q1 fiscal 2027 and $175 billion for calendar year 2026.
To manage the costs associated with building and leasing data centers, the company is thinking of structuring leases over 25 years instead of 15-year periods.
This would spread costs over a longer period and lower Microsoft's annual reported capital expenditure, making it easier to manage its massive investments in AI infrastructure.