Four to eight new data centers every month

Interesting insights on several topics from Microsoft in a partner roundtable, including Copilot and GenAI.

By 2024 Copilot was no longer a demo. Copilot for Microsoft 365 had been generally available to enterprise customers since 1 November 2023, at $30 per user per month.

Interesting insights on several topics from Microsoft in a partner roundtable, including Copilot and GenAI.

§The number behind the software

Every Copilot answer runs in a data center somewhere, and that physical side is the part of the post that stands out.

Microsoft had put a figure on its pace years earlier. In October 2021 Noelle Walsh, who runs Microsoft’s cloud operations, wrote: “We’re on track to build between 50 and 100 new datacenters every year in response to customer demand.” That is roughly four to eight a month, or one every four to seven days.

The base was already large. Microsoft’s own datacenter factsheets from April 2024 say it operates more than 300 datacenters in over 34 countries. Adding 50 to 100 a year means the fleet grows by a sixth to a third every year.

The money shows the same thing. On the earnings call of 30 July 2024, CFO Amy Hood said that capital expenditures including finance leases were $19 billion in the quarter. Roughly half of cloud and AI spend went to infrastructure, “where we continue to build and lease datacenters that will support monetization over the next 15 years and beyond.” The rest went mostly to servers, CPUs and GPUs.

§A physical deployment at software speed

A data center needs land, a grid connection, cooling, permits and people to run it. Each one is a construction project with its own local constraints. Doing that several times a month, in many countries at once, takes a supply chain of its own, with transformers and chips arriving on schedule. And each site is meant to earn money for a decade and a half.

I can’t recall similar examples even in other industries of large scale physical deployments like their data center strategy to open each month 4-8 new data centers (!!) in the foreseeable future.