Microsoft Plans to Triple Data Center Capacity to 38 Gigawatts by 2032

Microsoft plans to expand its data center capacity to approximately 38 gigawatts by 2032, more than tripling its current footprint, according to a Bloomberg News report citing people familiar with the matter. The ambitious buildout underscores the intensifying race among major technology companies to secure the computing infrastructure needed to power generative AI services.

According to the report, only about 2 gigawatts of Microsoft's current 12-gigawatt capacity is dedicated to AI-specific chips — a share that is expected to grow to roughly one-third of the planned 38 gigawatts once fully online. That shift signals a fundamental change in how the company is architecting its infrastructure to accommodate the computational demands of AI workloads.

Technology companies have been pouring billions of dollars into data centers to support generative AI services such as ChatGPT and Copilot, which require enormous amounts of computing power. Microsoft has been among the most aggressive spenders, and in July the company forecast stronger-than-expected cloud growth, offering fresh evidence that its massive AI investments are beginning to pay off. The results helped ease investor concerns that heavy spending on data centers and computing infrastructure could outpace actual demand.

Microsoft expects capital expenditures of $50 billion for the fiscal first quarter of 2027 and $175 billion for the 2026 calendar year. The company is also planning to spread long-term leases on data centers over 25 years rather than 15, a change that has the effect of lowering its annual reported capital expenditures. Microsoft did not immediately respond to a request for comment on the Bloomberg report.

The planned expansion reflects the broader industry trend of hyperscalers racing to build out AI-ready capacity, even as questions linger about whether demand can keep pace with the unprecedented levels of investment. For Microsoft, the bet is that AI services will become deeply embedded in enterprise and consumer workflows, making the infrastructure buildout a necessary foundation for long-term growth.