Microsoft plans to double its data centre capacity worldwide in less than two years, driven by strong demand for artificial intelligence, data centres, and cloud services. In the recent quarterly earnings call, CEO Satya Nadella announced Microsoft’s intention to double the size of its data centres as part of a broader plan to ensure its global infrastructure expands rapidly enough to meet the surge in demand for AI and related services, such as cloud computing. This year, the company plans to expand its artificial intelligence capacity by as much as 80%, further validating the significance of storage facilities in driving faster AI adoption across various businesses.
The expansion of the Azure region could be a logical result of Microsoft’s strategy, which positions its cloud platform as a top priority. Currently, Azure has about 400 data centres across 70 regions worldwide. Microsoft’s first fiscal quarter of 2026 showed strong financial performance: revenue grew 18% year over year to $77.7 billion, while operating income increased 24% to $38 billion. The primary beneficiaries of this growth were cloud and AI projects. While scepticism about the direct AI usage profits remains for many businesses, the need for the underlying infrastructure is rapidly increasing, and Microsoft, one of the key providers of such services, is reaping the benefits.
Expansion also involves investing $80 billion and building AI-optimised data centres by 2028, Microsoft’s most substantial infrastructure investment. The following core areas are to be covered by the investment: hyperscale AI data centres with liquid-cooled, high-density GPU clusters and custom chips; edge and sovereign clouds tailored for regulated industries and national AI models; energy and sustainability systems incorporating renewable energy, advanced cooling, and smart grid technologies. The expansion priorities also include building new cloud regions in crucial markets such as India, Taiwan, France, the UAE, Japan, and Brazil.
Microsoft’s extended association with OpenAI, the firm behind ChatGPT, has been a critical driver of this growth. Despite OpenAI already expanding its cloud options, Nadella James describes the collaboration as one of the most fruitful “co-innovation” efforts in the industry and remains hopeful for the future. The data centre growth follows the path of other tech players like Google and Amazon in their quest to dominate the infrastructure required for AI’s future. Although Microsoft’s announcement is almost the definition of “bullish,” the firm’s stock price barely lost ground after learning of the substantial increase in artificial intelligence expenses and tech investment in general. This is intriguing, as investors are increasingly apprehensive about the exorbitant costs associated with the industry’s leading edge. However, Microsoft continues to grow sustainably and invests heavily in climate-friendly data centres that prioritise energy efficiency and carbon emissions reduction. Microsoft’s global expansion effort exemplifies the company’s resolve to maintain its dominance as the globe’s digital transformation powerhouse. Moreover, it focuses on providing companies with more locations worldwide, enabling greater accessibility, speed, and reliability and fostering innovation in an AI-based economy.