Microsoft will invest $80B in AI data centers in fiscal 2025

And Microsoft isn’t the only company ramping up investments in AI-enabled data centers. All competing cloud providers are investing in either upgrading or opening new data centers to capture most of the business from large language model (LLM) developers and users.

IN report published October 2024Demand for generative AI will push Microsoft, AWS, Google, Oracle, Meta, and Apple to commit a total of $200 billion in capex in 2025, up from $110 billion in 2023, Bloomberg Intelligence estimates.

Microsoft is one of the biggest backers, followed by Google and AWS, Bloomberg Intelligence reports. His estimate of Microsoft’s AI capital spending of $62.4 billion for the 2025 calendar year is lower than Smith’s statement that the company will invest $80 billion in the fiscal year ending June 30, 2025.

Both figures, however, are far higher than Microsoft’s 2020 capital expenditures of “only” $17.6 billion. Much of the increase in spending comes from cloud services and the expansion of artificial intelligence infrastructure needed to provide computing power for OpenAI workloads.

Separately, Amazon CEO Andy Jassy said last October that his company plans total capital spending of $75 billion in 2024 and more in 2025, with much of that going to AWS, its cloud computing division.