Microsoft Vice President and President Brad Smith attends the first day of Web Summit in Lisbon, Portugal, on November 12, 2024. The world's largest technology conference this year, with 71,528 participants from 153 countries and 3,050 companies equipped with artificial intelligence is emerging for the most represented industry. (Photo: Rita Franca/NurPhoto via Getty Images)
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Microsoft plans to spend $80 billion in fiscal 2025 to build data centers that can handle artificial intelligence workloads, the company said Friday blog entry.
More than half of expected AI infrastructure spending will occur in the U.S., Microsoft vice president and president Brad Smith wrote. Microsoft's fiscal year 2025 ends in June.
“Today, the United States is leading the global artificial intelligence race thanks to private capital investment and innovation from American companies of all sizes, from dynamic startups to established enterprises,” Smith said. “At Microsoft, we've seen this firsthand through our work with OpenAI, from emerging companies like Anthropic and xAI, and through our own AI-enabled platforms and applications.”
Several leading tech companies are rushing to spend billions Nvidia graphics processing units to train and run AI models. The rapid spread of OpenAI's ChatGPT assistant, which launched in late 2022, has sparked an AI race for companies to deliver their own generative AI capabilities. Having invested over $13 billion in OpenAI, Microsoft provides the startup with cloud infrastructure and incorporates its models into Windows, Teams and other products.
Microsoft observed that in the first quarter of fiscal 2025, capital expenditures and assets acquired under financial leases were $20 billion globally, of which $14.9 billion was spent on real estate and equipment. Capital spending will increase sequentially in the fiscal second quarter, Microsoft Chief Financial Officer Amy Hood said in October.
The company's revenue from Azure and other cloud services grew 33% year-over-year, with 12 percentage points driven by artificial intelligence services.
Smith called on the President-elect Donald Trumpthe new administration to protect the country's leadership in artificial intelligence by educating and promoting American artificial intelligence technologies abroad.
“China is starting to offer developing countries subsidized access to rare chips and promising to build local AI data centers,” Smith wrote. “The Chinese wisely realize that if a country unifies China's AI platform, it will likely continue to rely on it in the future.”
He added: “The best response for the United States is not to complain about the competition, but to ensure victory in the coming race. This will require quick and effective action to promote US AI as a better alternative.”
