Microsoft to spend $80 billion in FY’25 on data centers for AI

Microsoft has earmarked $80 billion in fiscal 2025 to build data centers designed to handle artificial intelligence workloads, according to a company blog post.

Specifically, the tech giant plans to build out AI-enabled data centers “to train AI models and deploy AI and cloud-based applications around the world.” Of that $80 billion allocation, more than half will be spent in the United States, according to Microsoft Vice Chair and President Brad Smith. The tech giant’s 2025 fiscal year ends in June. 

“As we look into the future, it’s clear that artificial intelligence is poised to become a world-changing GPT. AI promises to drive innovation and boost productivity in every sector of the economy,” Smith wrote. “The United States is poised to stand at the forefront of this new technology wave, especially if it doubles down on its strengths and effectively partners internationally.”

Microsoft and OpenAI were reportedly in talks in April regarding the construction of a data center facility that would contain an AI supercomputer dubbed Stargate. The facility was estimated to cost over $100 billion to build. Notably, later in the year, Microsoft called the startup a “competitor” for the first time in an SEC filing.

AI’s insatiable thirst for electricity is expected to surge in the coming years, potentially leading to power shortages for data centers.