Microsoft Vice Chairman and President, Brad Smith, participates in the first day of the Web Summit in Lisbon, Portugal, on November 12, 2024. The conference has 71,528 attendees. the world's largest technology talk this year from 153 countries and 3,050 companies, with AI emerging as the most representative industry. (Photo by Rita Franca/NurPhoto via Getty Images)
Nurphoto | Nurphoto | Getty Images
Microsoft plans to spend $80 billion in fiscal 2025 on building data centers that can handle artificial intelligence workloads, the company said in Friday blog post.
More than half of the expected AI infrastructure spending will occur in the US, wrote Microsoft Vice Chairman and President Brad Smith. Microsoft's 2025 fiscal year ends in June.
“Today, the United States is leading the global AI race thanks to private capital investment and innovations by American companies of all sizes, from dynamic startups to established enterprises,” said Smith. “At Microsoft, we have seen firsthand through our partnership with OpenAI, from emerging companies like Anthropic and xAI, and our own AI-enabled software and application platforms.”
Several high-tech companies are rushing to spend billions on it Nvidia graphics processing units for training and running AI models. The rapid rollout of OpenAI's ChatGPT assistant, which launched in late 2022, started the AI race for companies to deliver their own generational AI capabilities. After investment over $13 billion in OpenAI, Microsoft provides cloud infrastructure to the startup and has integrated its models into Windows, Teams and other products.
Microsoft reported $20 billion in capital expenditures and assets acquired under finance leases worldwide, with $14.9 billion spent on property and equipment, in the first quarter of fiscal 2025. capital spending in a row in the second fiscal quarter, Microsoft Chief Financial Officer Amy Hood said in October.
Analysts polled by Visible Alpha were looking for an additional $63.2 billion in property and equipment in fiscal 2025, representing 42% year-over-year growth.
Microsoft's revenue from Azure and other cloud services increased 33% in the first fiscal quarter, with 12 percentage points coming from AI services.
Smith called on the President-elect Donald Trumpthe incoming administration to protect the nation's leadership in AI through education and the promotion of US AI technologies abroad.
“China is starting to offer subsidized access to developing countries to scarce chips, and is promising to build local AI data centers,” Smith wrote. “The Chinese are shrewdly recognizing that if a country stabilization of China's AI platform, it will likely rely on that platform in the future.”
He said, “The best response for the United States is not to complain about the competition but to make sure we win the race ahead. This requires us to move quickly and effectively to make American AI promotion as an alternative.”
