Microsoft has announced plans to spend over $80 billion constructing data centres to process AI workloads in the 2025 financial year.
Microsoft Chair and Vice President Brad Smith also revealed in a blog post that more than half of the company’s planned investment would be directed toward building and expanding data centres in the United States.
“None of this progress would be possible without new partnerships founded on large-scale infrastructure investments that serve as the essential foundation of AI innovation and use,” Smith wrote, confirming the investment plans.
In FY 2025, Microsoft is on track to invest approximately $80 billion to build out AI-enabled datacenters to train AI models and deploy AI and cloud-based applications around the world. 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.”
Microsoft outlines that its data centre investments will primarily support the company’s AI initiatives and the growing demand from customers using Azure’s cloud service, especially for access to NVIDIA Corp’s powerful graphics processing units (GPUs).
Smith stresses that major enterprises are directing billions of dollars into these resources to accelerate the development and deployment of AI models, highlighting a significant increase in competition for computing power to drive innovation in AI.
The executive also celebrates that American private businesses are the driving force behind the AI revolution, citing the impact of organisations like Anthropic, xAI and Microsoft’s partner and research outfit, OpenAI, on which Microsoft has a nonvoting board position.
“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 stated.
As Microsoft’s fiscal year for 2025 concludes in June, the company is already executing these data centre plans. After FY25 Q1, Microsoft disclosed around $20 billion in capital expenditures and assets acquired under finance leases globally in October. Of this amount, $14.9 billion was specifically invested in property and equipment, highlighting the company’s substantial financial commitment to expanding and enhancing its physical infrastructure, including these data centres.
How Does Microsoft’s AI Journey Continue Into 2025?
Just before Christmas, Microsoft renamed its 365 application suite of collaboration and productivity tools “365 Copilot”, further illustrating its ongoing AI evolution.
This month, Microsoft is rebranding the 365 app as Microsoft 365 Copilot, introducing a redesigned user interface optimised for AI-first experiences. The updates include a smaller top app header and a streamlined App toolbar on the left, consolidating all tools and settings. To improve usability, features like “Help me create” and “My Day” are being retired, ensuring a more focused and simplified interface.
Additionally, just before Christmas, Microsoft revealed a refreshed design for Copilot Chat. The updated “Microsoft 365 Copilot Chat” will include web chat and agents capable of accessing SharePoint and Graph Connector content. The service remains accessible via the Microsoft 365 Copilot app and the web, with plans to integrate it into Teams and Outlook, offering chat functionality and optional agent support directly within these platforms.
What Did November’s AI-Dominated Microsoft Ignite Signal for Microsoft’s AI And Copilot Ambitions?
Meanwhile, Microsoft Ignite was predictably dominated by AI and Copilot. Microsoft unveiled a series of updates designed to redefine business productivity and operational efficiency.
Microsoft introduced several new Copilot agents for its rebranded Microsoft 365, now known as 365 Copilot. The SharePoint agent offers rapid insights to aid decision-making, while the Employee Self-Service agent streamlines answers to workplace policy queries. In preview, the Facilitator agent boosts Teams collaboration by taking notes and generating conversation summaries.
Coming early next year, the Interpreter agent will enable real-time translation in nine languages, and the Project Manager agent will automate Planner workflows, including task assignments and status updates.
Looking to 2025, Copilot will bring powerful enhancements across Microsoft apps. Teams will gain the ability to summarise shared files and meeting screen shares. PowerPoint will introduce a Narrative Builder for branded presentations and support translations in 40 languages.
Excel will feature task-specific templates for budgeting and tracking, while Outlook will simplify meeting scheduling with agenda-creation tools. OneNote will incorporate Copilot for advanced note organisation, and Pages will support more robust content creation capabilities.
For IT admins, Copilot aims to revolutionise management via the Microsoft 365 Admin Center (MAC). The addition of Copilot Analytics seeks to deliver cutting-edge business impact measurement tools, including detailed dashboards and actionable reporting, offering an innovative approach to IT workflows.
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