Microsoft plans to expand its data center output to fuel the AI boom

In response to the soaring demand for artificial intelligence, Microsoft aims to triple its data center capacity within the next year. The surge in demand, particularly for foundation models and generative AI, has significantly increased the need for computing power. To meet this demand, Microsoft plans to double its Azure capacity in the latter half of this financial year, followed by tripling it in the first half of the next financial year. Internal documents obtained by Insider reveal the company’s efforts to procure “a record number of GPUs” to bolster its infrastructure for handling AI workloads. 

In the past year, Microsoft has already doubled its installed base of accelerators in response to the surging demand for AI. Additionally, the company committed billions last year to enhance its data center and cloud infrastructure.

While Microsoft has not explicitly confirmed specific plans, recent observations suggest an intent to expand its data center presence. A job posting earlier this year hinted at the company’s intention to grow its footprint in the Asia-Pacific region.

According to Synergy research, over half (51%) of global data center capacity was situated in the US, with the Asia-Pacific region holding a quarter (26%), primarily driven by China, which accounted for nearly two-thirds (62%) of the region’s capacity. Europe trailed behind, representing 17% of total capacity.

Looking forward, the market analytics firm anticipates a doubling of data center capacity within four years, with generative AI emerging as a key driving force.

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