Microsoft has announced plans to allocate $80 billion in its fiscal 2025 budget for the development of data centers tailored to support artificial intelligence workloads, as stated in a recent blog post.
According to Microsoft Vice Chair and President Brad Smith, more than half of the anticipated spending on AI infrastructure will be concentrated in the United States. The company’s fiscal year 2025 concludes in June.
“Today, the United States leads the global AI race thanks to the investment of private capital and innovations by American companies of all sizes, from dynamic start-ups to well-established enterprises,” Smith noted. “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI, from rising firms such as Anthropic and xAI, and our own AI-enabled software platforms and applications.”
Read more: Microsoft to invest $3.2 billion in cloud and AI infrastructure expansion in Sweden
Competitive landscape in AI technology
Moreover, numerous leading tech companies are rapidly investing billions in Nvidia graphics processing units for the training and execution of AI models. The swift rise of OpenAI’s ChatGPT assistant, launched in late 2022, has spurred a competitive race among companies to provide their own generative AI capabilities. Microsoft has invested over $13 billion in OpenAI, supplying cloud infrastructure to the startup and integrating its models into products like Windows and Teams.
Fiscal performance and expenditures
In the first quarter of fiscal 2025, Microsoft reported $20 billion in capital expenditures and assets acquired through finance leases globally, with $14.9 billion dedicated to property and equipment. Microsoft Chief Financial Officer Amy Hood further indicated that capital expenditures are expected to rise sequentially in the fiscal second quarter.
Additionally, Microsoft’s revenue from Azure and other cloud services surged by 33 percent in the first quarter, with AI services contributing 12 percentage points to that growth.
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