Microsoft plans 38GW data center capacity by 2032

Key facts

• Microsoft plans to increase its data center capacity to 38 gigawatts by 2032.
• About one-third of the planned 38 gigawatts will be dedicated to AI-specific chips.
• Microsoft's current data center capacity is 12 gigawatts, with 2 gigawatts for AI.
• Technology companies are investing heavily in data centers for generative AI services.
• Microsoft expects capital expenditures of $50 billion for fiscal Q1 2027 and $175 billion for calendar year 2026.
• The company is planning to spread long-term data center leases over 25 years instead of 15.

Microsoft plans to significantly expand its data center infrastructure, aiming for approximately 38 gigawatts of capacity by 2032, which would more than triple its current footprint, according to a Bloomberg News report citing sources familiar with the matter. Of the planned capacity, about one-third is expected to be dedicated to AI-specific chips, a substantial increase from the current 2 gigawatts out of 12 gigawatts. This expansion comes as technology companies are investing billions in data centers to support the immense computing power required for generative AI services like ChatGPT and Copilot. In July, Microsoft had already forecast stronger-than-expected cloud growth, indicating that its substantial investments in AI and computing infrastructure were beginning to yield positive results and ease investor concerns about spending outpacing demand. The company has projected capital expenditures of $50 billion for the fiscal first quarter of 2027 and $175 billion for the 2026 calendar year. To manage its reported annual capital expenditures, Microsoft is also planning to extend long-term data center leases from 15 years to 25 years.