Microsoft plans to invest $80 billion on AI-enabled data centers in fiscal 2025

Microsoft has been investing billions to enhance its AI infrastructure and broaden its data-center network.

Microsoft is planning to invest about $80 billion in fiscal 2025 on developing data centers to train artificial intelligence (AI) models and deploy AI and cloud-based applications, the company said in a blog post on Friday.

Investment in AI has surged since OpenAI launched ChatGPT in 2022, as companies across sectors seek to integrate artificial intelligence into their products and services.

AI requires enormous computing power, pushing demand for specialized data centers that enable tech companies to link thousands of chips together in clusters.

Microsoft has been investing billions to enhance its AI infrastructure and broaden its data-center network.

Analysts expect Microsoft's fiscal 2025 capital expenditure including capital leases to be $84.24 billion, according to Visible Alpha.

The company's capital expenditure in the first quarter of fiscal 2025 rose 5.3% to $20 billion.

As OpenAI's primary backer, the tech giant is considered a leading contender among Big Tech companies in the AI race due to its exclusive partnership with the AI chatbot maker.

More than half of Microsoft's $80 billion investment will be in the United States, Vice Chair and President Brad Smith said in the blog post.

"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 said.