Microsoft commits A$25 billion to build Australian AI capacity

[SYDNEY] Microsoft announced its biggest-ever investment in Australia, pledging to spend A$25 billion (S$23 billion) by the end of 2029 as it pushes deeper into the artificial intelligence market in the Asia-Pacific region.

The US giant will significantly expand its Azure AI supercomputing and cloud infrastructure in Australia, while committing to AI safety, training and cybersecurity initiatives, the company said in a statement ahead of a speech by CEO Satya Nadella at a Microsoft event in Sydney on Thursday (Apr 23).

Microsoft and US peers, such as Amazon.com, Meta Platforms and Alphabet, are spending billions of US dollars as they vie for AI users across the planet. Microsoft’s Copilot has struggled to keep pace with OpenAI’s ChatGPT and Google’s Gemini, and the company is betting on markets such as Australia to make gains.

“Australia has an enormous opportunity to translate AI into real economic growth and societal benefit,” Nadella said.

The company signed a memorandum of understanding with the government in line with its recently announced data centre and AI infrastructure developer guidelines and will collaborate with the new Australian Artificial Intelligence Safety Institute, formed to respond to AI-related risks and harms.

The investment builds on an A$5 billion commitment to Australia made in October 2023.

The company will also train three million more Australians in AI skills by the end of 2028, in addition to the more than one million it previously announced it would train in Australia and New Zealand, it said.

Microsoft’s long-term investment in Australia’s capabilities will help strengthen cyber defences and create opportunity for Australian workers and businesses, Prime Minister Anthony Albanese said.

Australia is seeking to build a strong AI ecosystem to keep up with economic leaders such as the US and China. Microsoft’s commitment in Australia follows similar announcements recently in Japan, Singapore and Thailand.

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In total, Microsoft and its US cloud computing peers plan to spend about US$650 billion this year to build out power-guzzling data centres.

As part of its AI offerings, Microsoft has shifted more focus to selling Copilot, its AI tool for the workplace, instead of offering it for free as part of a software bundle. It’s combining the separate Copilot teams for consumer and corporate clients in a bid to create a smoother AI service across its products. BLOOMBERG