Microsoft expects to spend $80 billion on AI-enabled data centers in fiscal 2025
Posted: Jan 03, 2025
- Microsoft plans to spend $80 billion in fiscal 2025 on AI data centers in the U.S.
- They are investing in AI-enabled software platforms and applications.
- Several top technology companies are spending billions on Nvidia GPUs for AI model training.
- Microsoft reported $20 billion in capital expenditures worldwide in the first quarter of fiscal 2025.
- Microsoft plans to spend $80 billion in fiscal 2025 on data centers for AI workloads
- Over half of the $80 billion spending will take place in the U.S.
- Microsoft has partnerships with OpenAI, Anthropic, and xAI
- Several tech companies, such as Nvidia, are investing in graphics processing units for AI
- Microsoft's capital expenditures and assets acquisitions in the first quarter of fiscal 2025 were $20 billion
- Azure and cloud services revenue grew 33% year over year, with 12 percentage points from AI services
- Brad Smith called on the incoming administration to promote U.S. AI technologies abroad to compete with China
- The U.S. needs to promote American AI as a superior alternative to China's platform
What do people on Reddit think?
🚨 Reddit sentiment: mixed/negative - While there is acknowledgment of Microsoft's strong financial position and growth potential, there is skepticism and criticism regarding cash flows, accounting practices, and potential stock performance impacts. Summarized comments: - Massive spending by Microsoft shows their financial capacity, following their $75 billion Activision acquisition in 2023 - Microsoft's investment is seen as one of the biggest bets in history - Some comments speculate about the benefits for other companies involved in data centers - Investments are depreciated over time, not expensed immediately - AI investments create circular transactions with companies like Nvidia and OpenAI - Skepticism on cash flows due to accounting techniques; depreciation expenses may impact future profits if AI isn't rapidly made profitable - Free cash flow projections suggest another sideways year for Microsoft stock - Opinions on whether data centers are powered by solar, battery, or nuclear energy - Potential for future growth through investments versus concerns over current stock performance and free cash flow yield Stock tickers discussed: $MSFT, $NVDA
Stay ahead of the market with AI stock alerts & AI summaries of the latest earnings, stock ideas for free with Fluid Bot. Sign up now!