Microsoft’s Global Data Centre Expansion

In August 2025, Microsoft announced a significant milestone in its cloud infrastructure development, adding over 2 gigawatts (GW) of new data centre capacity. This expansion brings its global footprint to more than 400 facilities across 70 regions, reinforcing Azure’s position as a leading platform for cloud and artificial intelligence (AI) services. ^[1]

A Global Network of Data Centres

Microsoft’s data centre network spans continents, with facilities strategically located to meet the growing demand for cloud services. In June 2025, the company launched new data centre regions in Indonesia, Malaysia, and Chile, enhancing its global presence and providing local data residency options for customers in these regions. ^[2]

The Azure global infrastructure includes over 60 regions and more than 300 data centres worldwide, interconnected by over 442,000 kilometres of terrestrial and subsea fibre. ^[3] This extensive network ensures low-latency access to services and supports the scalability required for AI workloads.

Driving Factors Behind the Expansion

1. Rising Demand for Cloud and AI Services

The surge in demand for cloud computing and AI services has been a primary driver of Microsoft’s data centre expansion. In the fourth quarter of fiscal year 2025, Azure’s revenue reached a record $75 billion, marking a 34% year-over-year increase. ^[1] This growth reflects the increasing reliance on cloud platforms for AI model training, data storage, and application deployment.

2. Strategic Partnerships and Investments

Microsoft’s partnerships, notably with OpenAI, have further accelerated the need for robust infrastructure. In fiscal year 2025, the company plans to invest $80 billion in data centre infrastructure, with more than half allocated to U.S.-based projects ^[4]. This investment underscores Microsoft’s commitment to leading in AI innovation and meeting the growing computational demands of AI applications. ^[5][6]

3. Commitment to Sustainability

Microsoft is dedicated to achieving carbon negativity by 2030 and has implemented sustainability initiatives across its data centres. The company has introduced Circular Centres that recycle and repurpose servers and hardware on-site, extending server lifespans by up to 90%. ^[7] These efforts contribute to reducing the environmental impact of its operations.

Return on Investment: Balancing Growth and Efficiency

While the expansion signifies Microsoft’s aggressive push into cloud and AI services, it also presents challenges in terms of return on investment (ROI). The company’s capital expenditures have increased significantly, with a projected $120 billion in annual spending for fiscal year 2025 ^[1]. This shift towards capital-intensive operations has led to a decrease in returns on invested capital, from 80% in 2021 to less than 40% in 2025. ^[8]

To optimise ROI, Microsoft is focusing on efficient resource allocation and strategic partnerships. The company has reassessed its infrastructure needs, halting or deferring data centre projects in the U.S. and Europe amounting to 2 GW of capacity. ^[5][9][4] This decision reflects a more measured approach, aligning infrastructure development with actual demand and technological advancements.

Looking Ahead: The Future of Microsoft’s Cloud Infrastructure

Microsoft’s data centre expansion is poised to continue, driven by the increasing demand for cloud and AI services. The company’s strategic investments and partnerships position it to remain at the forefront of the cloud computing industry. By balancing growth with efficiency and sustainability, Microsoft aims to deliver innovative solutions that meet the evolving needs of its global customer base.

For more detailed information and interactive exploration of Microsoft’s global data centre network, visit Azure Global Infrastructure Experience. ^[7]

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