Microsoft to spend $80 billion on AI data centres in 2025

BLOOMBERG: Microsoft Corp. plans to invest $80 billion this fiscal year in expanding its data centres, highlighting the substantial capital needed for artificial intelligence initiatives. In a blog post, Microsoft President Brad Smith noted that over half of this planned expenditure through June 2025 will occur in the U.S. He pointed out that the recent advancements in AI are primarily due to the “large-scale infrastructure investments that serve as the essential foundation of AI innovation and use.”

Cloud services providers like Microsoft and Amazon.com Inc. are in a competitive race to enhance their computing capabilities through the construction of new data centres. In the previous fiscal year, which ended in June 2024, Microsoft allocated over $50 billion for capital expenditures, predominantly focused on building server farms to meet the burgeoning demand for AI services.

Additionally, Smith advised the incoming Trump administration to avoid imposing “heavy-handed regulations” on AI. He emphasized that the primary public policy focus in the U.S. should be to empower the private sector to continue advancing with strong support.

A significant portion of the data centre expenditures is directed towards acquiring high-performance chips from companies such as Nvidia Corp., as well as from infrastructure providers like Dell Technologies Inc. The energy demands of these massive AI-driven server farms have led Microsoft to negotiate the reopening of a reactor at the Three Mile Island nuclear power plant in Pennsylvania, famous for its partial meltdown in 1979. Similarly, Amazon and Google have also pursued agreements related to nuclear power.