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Microsoft intends to allocate $80 billion towards AI-powered data centers in fiscal year 2025.

 Microsoft intends to allocate approximately $80 billion (around Rs. 6,86,200 crore) in fiscal 2025 for the development of data centers aimed at training artificial intelligence (AI) models and implementing AI and cloud-based applications, as stated by the company in a blog post on Friday. Since the launch of ChatGPT by OpenAI in 2022, investment in AI has significantly increased, with businesses from various sectors striving to incorporate artificial intelligence into their offerings. The demand for AI necessitates substantial computing power, leading to a rise in the need for specialized data centers that allow tech firms to connect thousands of chips in clusters.

Microsoft has been pouring billions into improving its AI infrastructure and expanding its data center network. Analysts predict that Microsoft's capital expenditure for fiscal 2025, including capital leases, will reach $84.24 billion (approximately Rs. 7,20,475 crore), as per Visible Alpha. In the first quarter of fiscal 2025, the company's capital expenditure increased by 5.3% to $20 billion (around Rs. 1,71,541 crore).

As the main supporter of OpenAI, the tech giant is viewed as a top player among Big Tech firms in the AI competition, thanks to its exclusive collaboration with the AI chatbot developer. 

According to Vice Chair and President Brad Smith in a blog post, over half of Microsoft's $80 billion (approximately Rs. 6,86,200 crore) investment will be allocated in the United States. "Currently, the United States is at the forefront of the global AI competition, driven by private capital investments and innovations from American companies of all sizes, ranging from dynamic start-ups to established enterprises," Smith stated.

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