Microsoft To Ramp Up AI Data Center Investment To $80B This Year

Microsoft plans to spend close to $80B on data centers in 2025, up 44% from last year as Big Tech races to build out the infrastructure for its artificial intelligence ambitions. 

In a blog post published Friday, Microsoft President Brad Smith revealed the increased spending on data centers for training AI models, deploying AI and hosting cloud-based applications. More than half of that investment will be in the United States, he said. 

The spending increase comes on the heels of a 2024 fiscal year in which AI infrastructure spending grew Microsoft’s capital expenditures by nearly 75%. 

Even among the tech giants driving the ongoing AI arms race and subsequent data center building boom, Microsoft has been one of the most aggressive when it comes to expanding the scale of its data center footprint. The company’s surging capex has been driven in part by its partnership and infrastructure-sharing agreement with ChatGPT-maker OpenAI.

Microsoft reportedly has more than five gigawatts of data center capacity available already and will add at least 1.5 gigawatts in the first half of this year. In addition to its own data center infrastructure, Microsoft also signed a deal with AI cloud startup CoreWeave last year that could be worth as much as $10B. 

Along with announcing the firm’s ramped-up data center spending, Smith’s blog post also called on the incoming Trump Administration to take certain steps to promote the continued growth of the AI industry in the U.S. and ensure the country maintains its global leadership in the development of these technologies. 

Specifically, Smith urged the U.S. to take steps to ensure that it is American AI computing and technology, not Chinese, that dominates globally across international markets. In part, this means paving the way for data centers to be built out as fast as possible in the U.S., he suggests. 

“The United States cannot afford to slow its own private sector with heavy-handed regulations,” Smith wrote.  “The country instead needs a pragmatic export control policy that balances strong security protection for AI components in trusted datacenters with an ability for U.S. companies to expand rapidly and provide a reliable source of supply to the many countries that are American allies and friends.”

While Microsoft is growing its data center development pipeline, the company also revealed last week that it has paused construction on its massive data center campus in Mount Pleasant, Wisconsin, where it owns nearly 1,900 acres. According to Wisconsin Public Radio, which first reported the pause, Microsoft is still on track with the first phase of the project, the $3.3B buildout of AI data centers on 215 acres expected to be completed by the end of this year. 

Future phases, on the other hand, have been delayed while the company evaluates whether the planned facilities require significant changes in scope and design to accommodate AI technology. The firm plans to meet with state and local officials to evaluate how these changes could impact permitting for the project. 

Despite the delay, Microsoft insists the project will still move forward. 

“We anticipate that this process will last months,” the spokesperson said. “In the meantime, our commitment to and construction of our planned data center campus continues with high priority for our business.”