Microsoft has unveiled plans to invest $80bn in artificial intelligence (AI)-focused data centres during its fiscal year 2025 (FY25), with more than half of the investment earmarked for the US. In a blog post, the tech giant’s vice chair and president Brad Smith highlighted the transformative potential of AI as a “general-purpose technology” (GPT) comparable to electricity and computer chips in prior industrial revolutions. He also underscored the company’s role in bolstering the US economy through cutting-edge AI infrastructure, training initiatives, and international cooperation.
The move comes as global demand for AI continues to surge, driven by applications such as OpenAI’s ChatGPT. The increasing need for immense computing power to train AI models has intensified the development of advanced data centres that interconnect thousands of high-performance chips. Microsoft’s new commitment reflects its efforts to keep up with the AI race, with investments aimed at training AI models and deploying AI-enabled cloud applications. Analysts estimate Microsoft’s total capital expenditure for fiscal 2025, including leases, could reach $84.24bn, according to data from Visible Alpha.
AI fuelling economic shifts
Microsoft outlined a three-pronged approach to bolster America’s position in AI technology. This includes enhancing AI infrastructure, expanding skilling programmes to equip workers with AI expertise, and fostering global AI partnerships to ensure the US maintains a competitive edge. Smith called for a robust partnership between the government, private enterprises, and educational institutions to fully capitalise on AI’s economic potential.
Smith also drew parallels between AI and previous technological milestones that revolutionised economies, such as the steam engine, electrification, and computer software. He suggested that AI could become the defining innovation of this era, unlocking productivity across industries while reshaping the global workforce. However, he also acknowledged challenges, including the potential for job displacement.
In the blog post, he encouraged the incoming Trump administration to extend its AI initiatives, including the 2019 executive order that prioritised AI research and workforce training. Smith urged the government to boost funding for foundational AI research through institutions like the National Science Foundation and to expand educational grants and apprenticeship programmes in STEM fields.
According to Microsoft, the investment represents the intensifying global competition in AI, particularly between the US and China. Smith warned of China’s approach, likening it to its subsidised push in telecommunications, which resulted in widespread adoption of Huawei products. To counter this, he urged the US to accelerate the international deployment of its AI technologies through private-sector investment and strategic partnerships with allies.
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