In fiscal 2025, Microsoft anticipates allocating $80 billion towards data centers that are enhanced with artificial intelligence.

• Microsoft plans to invest $80 billion in building data centers capable of handling AI workloads, according to a Friday blog post.
• Microsoft Vice Chair and President Brad Smith stated that over half of the company's $80 billion in spending will occur in the U.S.

The company announced that it plans to invest $80 billion in building data centers capable of handling AI workloads in fiscal 2025, as stated in a Friday blog post.

Microsoft Vice Chair and President Brad Smith wrote that over half of the expected AI infrastructure spending will occur in the U.S. during the 2025 fiscal year, which ends in June.

"Smith stated that the United States is leading the global AI race due to the investment of private capital and innovations by American companies of all sizes, including start-ups and established enterprises. Microsoft has witnessed this firsthand through its partnership with OpenAI, as well as through the rise of firms such as Anthropic and xAI, and its own AI-enabled software platforms and applications."

Billions of dollars are being spent by top-tier technology companies on graphics processing units for AI model training and running. The rapid popularity of OpenAI's ChatGPT assistant, launched in late 2022, sparked a race among companies to develop their own generative AI capabilities. Microsoft, having invested over $13 billion in OpenAI, provides cloud infrastructure to the startup and has integrated the startup's models into Windows, Teams, and other products.

In the first quarter of fiscal 2025, Microsoft reported $20 billion in capital expenditures and assets acquired under finance leases worldwide, with $14.9 billion spent on property and equipment. Microsoft's Chief Financial Officer Amy Hood stated in October that capital expenditures will increase sequentially in the fiscal second quarter.

Azure and other cloud services revenue of the company increased by 33% annually, with 12% of the growth attributed to AI services.

Smith urged the incoming administration of President-elect Donald Trump to safeguard the country's leadership in AI by prioritizing education and marketing U.S. AI technologies abroad.

"China is providing subsidized access to scarce chips to developing countries and plans to establish local AI data centers, recognizing that countries that adopt its AI platform are likely to remain dependent on it in the future," Smith wrote.

"To succeed in the race ahead, the United States should not whine about competition but instead promote American AI as the superior choice. This will necessitate swift and effective action."

Microsoft intends to invest $80 billion in developing AI technology this year.