Microsoft Corp. has revealed plans to invest more than $80 billion in the construction of data centers for artificial intelligence workloads during its current fiscal year, part of an effort to cement its status as a leader in the fast-growing industry.

The company announced its plans in a blog post Friday. Microsoft Chair and Vice President Brad Smith wrote that more than half of the money will be spent on data centers in the U.S. The company’s fiscal year ends in June, which means that its spending plans are well under way.

Smith wrote that the U.S. currently leads the global AI race thanks to a combination of investment from private capital and innovations by American companies, ranging from established enterprises to dynamic startups. “At Microsoft, we’ve seen this firsthand through our partnership with OpenAI, from rising firms such as Anthropic and xAI, and our own AI-enabled software platforms and applications,” Smith said.

Microsoft’s data center investments will support both its own AI workloads and those of customers using the Azure cloud computing service to access graphics processing units built by Nvidia Corp. According to Smith, top-tier enterprises are rushing to spend billions of dollars on those resources, in order to train and run their AI models.

The AI race was kicked off by the debut of OpenAI’s insanely popular ChatGPT assistant, and it has sparked a desire for almost every major company to create its own generative AI applications. Microsoft has led the way. In addition to investing more than $13 billion in OpenAI, it has also developed its own AI models, which are incorporated into products such as Windows and Teams, along with models from OpenAI and other AI firms.

During the first quarter of fiscal 2025, Microsoft reported around $20 billion in capital expenditures and assets acquired under finance leases globally, with $14.9 billion of that amount being spent on property and equipment. In October, the company’s chief financial officer Amy Hood said this spending will increase sequentially in the second quarter.

That month, analysts surveyed by Visible Alpha said they were expecting the company to commit approximately $63.2 billion on expenditure towards property and equipment during fiscal 2025, which would represent year-over-year growth of 42%.

It remains to be seen when Microsoft would be able to recoup such a massive investment, but its AI-related revenue is growing fast. During the first quarter, revenue from Azure and other cloud services rose 33%, with 12% of that stemming from AI services, the company said.

In his blog post, Smith called on incoming President Donald Trump to protect the U.S.’s leadership in AI by investing in education and helping to promote the use of American AI technologies globally.

‘China is starting to offer developing countries subsidized access to scarce chips, and it’s promising to build local AI data centers,” Smith pointed out. “The Chinese wisely recognize that if a country standardizes on China’s AI platform, it will likely continue to rely on that platform in future.”

According to Smith, the best way to respond is not by complaining, but by taking steps to ensure it wins the race. “This will require that we move quickly and effectively to promote American AI as a superior alternative,” Smith added.

Photo: Microsoft