Microsoft surprises analysts with massive $80B AI investment plans for 2025
Rivals won't want to lag behind or spend too much on this unproven business.
Microsoft is set to invest $80 billion in fiscal 2025 to expand its AI datacenter capabilities, Brad Smith, the company's president and vice chairman wrote in a blog post. Microsoft sees artificial intelligence as the next industrial revolution and wants to participate in it. While analysts certainly were aware of the software giant's AI ambitions, few if any expected the company to bet that much money on a technology that has yet to prove its profitability.
"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," wrote Brad Smith in his 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."
Microsoft's move solidifies its position as a leader in AI, which is, of course, closely tied to its exclusive partnership with OpenAI. Naturally, this also means that OpenAI will benefit from this major investment. Analysts—and possibly rivals like Google, Meta, and xAI—probably never expected Microsoft to invest such a significant amount in AI, but that is exactly what is happening.
"This is above most analysts estimates," wrote Ben Bajarin, CEO and Principal Analyst Creative Strategies. "Expect all their CapEx models to go up."
While Microsoft disclosed that the investment will cover datacenters, it did not reveal whether this also includes power infrastructure for datacenters, which the company envisions to include both small and large nuclear power plants capable of powering small cities. As these are capital expenditures, and with plans to operate nuclear power facilities by 2028, the budget may also include spending on these plants. However, this remains speculative for now.
When it comes to actual hardware spending, rumors suggest that Microsoft is one of Nvidia's primary customers for the Blackwell platform and is willing to invest in datacenter infrastructure involving 120 kW to rumored 140 kW cabinets (up from 40 kW today). Redesigning datacenters to accommodate such infrastructure is costly, but Microsoft appears well-prepared in terms of its willingness to spend.
Microsoft's president sees AI as the next step in the industrial revolution, akin to the invention of the steam engine, which propelled the United Kingdom to the pinnacle of the global economy, and the widespread adoption of electricity in the United States, which eventually established America as the world's leading economy. As industries grow more complex and interconnected, AI is becoming a crucial technology across many sectors of the economy.
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"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," wrote Brad Smith. "At Microsoft, we have 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."
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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hotaru251 "ai" is such a huge waste of $...imagine how much good all the billions spent could have done to better the world at large and instead its wasted on soemthing most people have no care for and has no future where they'll make back even 1% of the $ spent..Reply -
ezst036 Some of that $80 B is so that Microsoft can even better spy on you using its adware telemetry, Recall, and other things nobody but Microsoft wants.Reply -
d0x360 Replyhotaru251 said:"ai" is such a huge waste of $...imagine how much good all the billions spent could have done to better the world at large and instead its wasted on soemthing most people have no care for and has no future where they'll make back even 1% of the $ spent..
You don't see the value in some sexy AI chat bots? For shame...
Seriously though there is definitely benefits but we are in early days.. like invented the abacus early -
passivecool Reply
don't forget the development of the microchip terminator robots in the vaccinations :rolleyes:ezst036 said:Some of that $80 B is so that Microsoft can even better spy on you using its adware telemetry, Recall, and other things nobody but Microsoft wants.
/irony
1. all the tech giants have so much cash that it is impossible to for them to invest it in any direct business development. So some of the money is developing capacity and some is "riding the elevator" in terms of capital gains.
tech giants got to be tech giants because they made better calls than you did.
2. if you follow the plans to restructure open ai from a NPO to a 4profit+NPO structure, and the controversy surrounding it, then it looks like a good idea for microsofts' to develop it's own capacities, The balance is staying in the race while not triggering antitrust mechanisms.
See:
partnership OpenAI
purchase Nuance
investment G42
inbibing Inflection
investment Mistral
Microsoft und Blackrock plan a 30 bn ai investment fundall that fun costs cash.
There's always people who overhear the big bang.
Or hear it late.
I have to admit, I was one of them.
My observation was that Axmizon, having bought a new dishwasher there, would offer me, for weeks, more dishwashers.
But the page has turned and every week I can observe new real implementations in software and platforms I use. Some of them are actually really helpful. Looks like baby steps, but the problem is, that innovative companies who are able to adapt can quickly run (processes).
Quote of the Day:
AI will not take away your job.
But someone who knows how to use it will. -
ezst036 Reply
Why would I forget something imaginary like robots that cannot be embedded into Windows OS when I can remember something that not only can be embedded, but is in fact already embedded?passivecool said:don't forget the development of the microchip terminator robots in the vaccinations :rolleyes:
Windows 11 update brings advertisements to the start menuhttps://www.tomshardware.com/software/operating-systems/windows-11-update-brings-advertisements-to-the-start-menu
Microsoft's redesign of the Windows 11's Weather app shoves in yet more adshttps://www.tomshardware.com/software/windows/microsoft-shoves-ads-into-windows-11s-weather-app
A lot people who are Microsoft/Windows apologists do everything they can to dance around and throw whataboutisms around and throw distractions around to be disruptive but the undeniable fact remains that Microsoft willingly transformed Windows from just an operating system into an operating system with factory spyware and factory adware platform out of the box.
That's simply the fact and there's nothing you can do about it. And I only provided two quick links. Microsoft has loaded up Windows with malicious adware telemetry. This is the new reality. Microsoft did it to themselves, or rather, Microsoft did it against their customers. It's deceitful and aggressive and terrible. This is NOT what their customers purchased Windows for(even as a Best Buy/Walmart/NewEgg pre-load), nobody is seeking an adware OS on their home computer, nobody. Nobody desires the adware and the spyware.
Dance, dance, dance your dance if you must, but I don't buy into the distractions. And Microsoft is trying to revive Recall, despite how unpopular it is.
Nothing I said is inaccurate. This is in part what they're using the $80 B for. To be terrible to their own customers.