This was part of a confidential slide deck from the company’s Cloud Operations + Innovation team that was presented earlier this year.

Under the heading “Commercial Cloud and AI Demands: Fueling our Expansion,” the document noted that Microsoft surpassed 5 gigawatts of total data center installed capacity in the first half of its latest fiscal year.

The rise of generative AI and huge foundation models is fueling a new data center boom. Microsoft is leading the way, through its partnership with OpenAI, the startup behind ChatGPT and GPT-4.

These AI models need to be trained on mountains of data and then fine-tuned intensely. That takes thousands of GPUs and a pile of other related gear that’s housed in huge data centers. These facilities use so much power that their capacity is measured in megawatts and gigawatts of electricity.

Microsoft’s 5 gigawatts of installed data center capacity is equivalent to Hong Kong or Portugal’s annual energy consumption, according to Shaolei Ren, an electrical and computer engineering professor at UC Riverside.

“Astonishing speed”

It doesn’t stop there. The software giant laid out even more radical growth plans for its data center empire in the document obtained by BI.

“With a strong Commercial Cloud business, our goal is clear,” Microsoft stated in this part of the slide presentation.

• Microsoft wants to double new data center capacity in the second half of its fiscal year. This runs from early 2024 to the middle of this year.

• In the first half of Microsoft’s 2025 fiscal year, which runs from early July through the end of 2024, the company aims to “achieve 3x growth” in new data center capacity.

• This will require Microsoft to deliver more than 200 megawatts in data center capacity every month.

“This is an astonishing speed,” Ren told BI. “This is a very large data center capacity.”

Microsoft’s capacity plans suggest the company is either seeing huge demand, or simply wanting to stay competitive by securing future power capacity that otherwise might be taken by competitors, Ren explained.

This also raises questions about the environmental consequences of adding such a large data center footprint, given the carbon emissions and water consumption of the facilities, he added.

A Microsoft spokesperson declined to comment.

‘Record-level GPU capacity’

The company is also securing a record number of GPUs to handle new AI workloads in data centers.

In the second half of last year, Microsoft delivered “record-level GPU capacity,” more than doubling its total installed GPU base, the document stated, without mentioning actual numbers.

Microsoft’s GPU footprint expanded into 39 additional data centers in this period, and the company now has “AI clusters” live in 98 locations globally.

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