Microsoft to Spend $80 Billion on AI Datacenters in FY 2025

Microsoft said Friday that it would spend $80 billion building out its Ai infrastructure in fiscal year 2025, about half that in the United States. This isn’t all that surprising, given that it’s spent about $20 billion per quarter on AI over the past few months. But now we know there’s no slowdown in sight.

We also know that Microsoft isn’t above pandering to an incoming presidential administration.

“In many ways, artificial intelligence is the electricity of our age, and the next four years can build a foundation for America’s economic success for the next quarter century,” Microsoft president and vice chair Brad Smith writes. “It’s clear that artificial intelligence is poised to become a world-changing General-Purpose Technology, or GPT. AI promises to drive innovation and boost productivity in every sector of the economy. 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.”

Getting past the obvious here, Smith reveals that Microsoft is “on track” to spend–sorry, “invest”–$80 billion to “build out AI-enabled datacenters to train AI models and deploy AI and cloud-based applications around the world. More than half of this total investment will be in the United States, reflecting our commitment to this country and our confidence in the American economy.”

To help Microsoft and other American companies advance the common good, so to speak, the firm is calling on the US government to expand on previous federal investments in AI research and make federal data and computing resources more accessible. He addresses the obvious concerns about AI causing job losses–“all new technologies disrupt the economy and displace some jobs”–and argues that the gains will be much better than the losses. “Equipping all Americans with the skills needed to use AI to pursue higher-paying jobs and more successful careers should be our national north star,” he says.

Smith also claims that the US is in a strong position to the win the AI race with China, noting that American products are more trusted than their Chinese counterparts. “Our private sector is unmatched in its ability to invest in infrastructure around the world,” he notes. “With a balanced and common-sense approach to export control policy, the United States can solidify the diplomatic relations that will be critical to global AI adoption … There are many reasons to be optimistic about the role of American AI.”

And then there is what feels like the real reason for this reach-out.

“The United States cannot afford to slow its own private sector with heavy-handed regulations,” he writes. “The country instead needs a pragmatic export control policy that balances strong security protection for AI components in trusted datacenters with an ability for U.S. companies to expand rapidly and provide a reliable source of supply to the many countries that are American allies and friends.”

Microsoft’s fiscal year ends June 30.