Microsoft has announced plans to allocate approximately $80 billion (around Rs. 6,86,200 crore) toward the development of data centers in fiscal 2025. This initiative aims to enhance capabilities in training artificial intelligence (AI) models and deploying AI and cloud-based applications, according to a blog post released on Friday.
The surge in investment in AI follows the debut of OpenAI’s ChatGPT in 2022, driving companies across various sectors to explore the integration of artificial intelligence into their offerings.
The increasing demand for AI technologies necessitates significant computing power, thereby intensifying the need for specialized data centers. These facilities are crucial for tech companies looking to connect thousands of chips in clusters for optimal performance.
Microsoft has committed substantial resources to improve its AI infrastructure and expand its network of data centers.
Analysts predict that Microsoft’s capital expenditures, including capital leases, will reach $84.24 billion (approximately Rs. 7,20,475 crore) for fiscal 2025, based on insights from Visible Alpha.
In the first quarter of fiscal 2025, the company’s capital expenditure rose by 5.3% to $20 billion (about Rs. 1,71,541 crore).
As the leading investor in OpenAI, Microsoft is viewed as a key player in the competitive AI landscape, particularly due to its exclusive partnership with the AI chatbot provider.
According to Vice Chair and President Brad Smith, more than half of the $80 billion investment will be focused in the United States. He emphasized the nation’s leadership in the global AI arena, attributing this to substantial private investment and the innovations of American companies, from nimble start-ups to longstanding enterprises.
© Thomson Reuters 2024
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