Microsoft plans to triple data center capacity by 2032

Microsoft ↗ 2.75% intends to more than triple its global data center capacity to over 38 gigawatts by 2032, up from approximately 12 gigawatts today, according to a Bloomberg report published Thursday. The expansion would give the company a computing footprint that surpasses the peak electricity consumption of New York state.bloomberg+3

The plan underscores how aggressively the tech giant is moving to meet surging demand for artificial intelligence and cloud computing services — demand so strong that the company has been forced to turn away some business.investing+1

A $145 Billion Spending Spree

The planned capacity increase covers both company-owned and leased facilities but excludes computing power rented from neoclouds like CoreWeave, according to people familiar with the plans cited by Bloomberg. The sources cautioned that the road map could shift, as data centers take years to build and changing customer preferences or new technology could alter current assumptions.investing

Microsoft's capital expenditures reached $145 billion in its most recent fiscal year, and analysts expect spending to continue growing. The company reported more than $130 billion in new data center leases in a single recent quarter, reflecting an accelerating pace of AI infrastructure investment.ground+2

Industry-Wide Boom

Microsoft's expansion is part of a broader infrastructure arms race among the largest cloud computing companies. Microsoft and Meta Platforms ↗ 5.12% have each committed tens of billions in additional data center leases in recent quarters, pushing overall industry commitments to future data center capacity past $850 billion, according to a Bloomberg analysis of regulatory filings.bloomberg

Separately, Europe is emerging as a major destination for data center investment. On Wednesday, Google Alphabet Inc. ↗ 0.73% announced at least €13 billion in AI infrastructure spending in Finland, joining Microsoft and TikTok in betting more than $30 billion on the country.fortune

Chip Suppliers Stand to Benefit

Nvidia ↘ 4.27% shares edged higher in after-hours trading Thursday following the Bloomberg report, as the expansion is expected to drive demand for the AI processors and computing hardware that power Microsoft's data centers. The planned build-out offers a window into how much computing capacity Microsoft aims to secure in exchange for its investments — and how much business could flow to chip suppliers in the years ahead.investing