Microsoft to Invest $80B in AI, but Adjust Data Center Plans

Microsoft announced it is sticking to its plan to invest over $80 billion in capital expenditures this fiscal year, which ends in June 2025.

The company intends to focus on data centers that support artificial intelligence (AI) workloads, despite recent reports suggesting changes to its infrastructure plans.

Possible Adjustments to Infrastructure

While Microsoft remains committed to its $80 billion investment, the company acknowledged that it might adjust its data center infrastructure in some areas.

This comes after an analyst report from TD Cowen indicated that Microsoft may have canceled leases with at least two private data center operators.

“We may strategically pace or adjust our infrastructure in some areas,” said a Microsoft spokesperson. The company emphasized that its overall plans are on track as it continues to meet increasing customer demand, particularly for AI services.

Stock Market Impact

Microsoft’s shares fell by 1.9% on Friday following the report, contributing to a broader market decline. Data center companies also saw declines, with Digital Realty Trust dropping 3.4% and Applied Digital down 15%.

Despite the adjustments, Microsoft remains optimistic about its future growth. The company continues to build its own data centers and lease additional capacity through providers like CoreWeave.

Microsoft’s large investment in OpenAI, part of the $500 billion Stargate data center initiative, is also part of the company’s strategy to grow its AI capabilities.

Building for the Future

Microsoft’s spokesperson stated that the company’s investments have positioned it to meet customer demands. Last year, Microsoft added more data center capacity than in any previous year, and the company plans to keep growing in all regions, allocating resources to future growth areas.

Though some adjustments may be made, Microsoft’s commitment to expanding its AI and data center operations remains strong. The company is dedicated to supporting the increasing demand for AI workloads, with a focus on long-term growth.