Microsoft to invest $80 billion in AI in 2025

Microsoft plans to invest about $80 billion in fiscal 2025 to develop data centers for training AI models, deploying AI applications and sprawling data centers, the company said in a blog post on Friday.

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

AI requires massive computation, driving demand for specialized data centers that enable tech companies to connect thousands of chips together in clusters.

Microsoft is investing billions of dollars to bolster its AI infrastructure and expand its data center network.

Analysts expect Microsoft’s capital spending in fiscal 2025, including capital leases, to be $84.24 billion, according to Visible Alpha.

Microsoft’s capital spending in the first quarter of fiscal 2025 rose 5.3% to $20 billion.

As a major backer of OpenAI, Microsoft is seen as a leading contender among big tech companies in the AI race because of its exclusive partnership with the AI chatbot maker.

More than half of Microsoft’s $80 billion investment will be in the United States, Microsoft Vice President Brad Smith said in a blog post, as seen by Reuters.

“Today, the United States is leading the global AI race thanks to private equity investment and innovation from American companies of all sizes, from dynamic startups to established companies,” he said.