How AI, Energy Requirements Are Shaping Data Center InvestmentHow AI, Energy Requirements Are Shaping Data Center Investment

Earlier this month, Microsoft announced it would invest about $80 billion in data centers powered by AI. As part of its “golden opportunity for American AI,” the company will train AI models and roll out AI and cloud-based applications with this investment.

“In FY 2025, Microsoft is on track to invest approximately $80 billion to build out AI-enabled data centers to train AI models and deploy AI and cloud-based applications around the world,” wrote Brad Smith, vice chair and president of Microsoft, in a Jan. 3 blog post. “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.”

Last year, Microsoft said it would invest more than $35 billion across 14 countries within three years to construct AI and cloud data center infrastructure. It is also collaborating with BlackRock and MGX to form an international investment fund that contributes up to an additional $100 billion for AI infrastructure and the AI supply chain, Smith wrote.

“Microsoft is all-in on AI much like they were with the cloud, and AI has eclipsed their cloud efforts much like the cloud eclipsed Windows,” says Rob Enderle, principal analyst with the Enderle Group, via email.

Tony Harvey, a senior director analyst at Gartner, also sees the investment as a sign that Microsoft is committed to AI and must invest to lead the market in this area. He expects Microsoft’s investments in AI data centers to focus on many large language models (LLMs) and then include AI agents.

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