Of Microsoft’s current 12-gigawatt capacity, only about 2 gigawatts are related to dedicated AI chips, and that share is expected to increase in the future to about one-third of Microsoft’s planned 38-gigawatt capacity.
Tech companies are investing billions of dollars to develop data centers to provide the infrastructure needed for generative AI services such as ChatGPT and Copilot. These services require very high processing power.
In July Microsoft predicted that the growth of its cloud services would exceed expectations. That forecast was another sign that Microsoft’s large investments in AI are paying off and eased investors’ concerns that the heavy costs of building data centers and processing infrastructure would outpace demand.
Microsoft forecast that its capital expenditures in the first quarter of fiscal 2027 would reach $50 billion and total $175 billion for the current calendar year.
According to a Reuters report, the company also plans to set long-term data center lease contracts for 25-year periods instead of 15 years. This move will reduce Microsoft’s reported annual capital expenditures./ ISNA