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Microsoft's AI Infrastructure Boom: 20GW by 2028
28 May
Summary
- Microsoft's AI data center footprint may reach 20 gigawatts by fiscal 2028.
- AI business has surpassed a $37 billion annual revenue run rate.
- Capital expenditures are projected to exceed $40 billion for AI investments.
Microsoft is significantly scaling its artificial intelligence infrastructure, with projections indicating a substantial expansion of its data center footprint. Morgan Stanley estimates this capacity could grow from approximately five gigawatts in fiscal 2024 to nearly 20 gigawatts by fiscal 2028.
The company's AI business has achieved an impressive annual revenue run rate exceeding $37 billion, marking a 123% year-over-year increase. This growth highlights a demand for AI infrastructure and enterprise AI applications that continues to surpass available capacity.
To meet future demand and facilitate AI-driven growth, Microsoft is accelerating infrastructure investments. Capital expenditures are expected to surpass $40 billion. Despite trading at a premium valuation, analysts anticipate sustained growth across cloud, productivity software, and enterprise applications.
