Microsoft Adds 2GW Data Centre Capacity as Azure Use Soars
Microsoft has reported record quarterly results driven by sharp growth in cloud and AI infrastructure, with its Azure platform crossing US$75bn in annual revenue.
As part of this expansion, the company added more than 2GW of new data centre capacity over the past year, increasing its global footprint to more than 400 facilities across 70 regions.
The tech giant’s fourth-quarter revenue reached US$76.4bn, an 18% year-on-year increase.
Its Microsoft Cloud division, which includes Azure, brought in US$46.7bn for the quarter alone, growing 27%. Annual revenue from Microsoft Cloud has now surpassed US$168bn.
“We continue to lead the AI infrastructure wave, and took share every quarter this year,” says Satya Nadella, Chairman and CEO of Microsoft.
Azure expansion underpins enterprise AI scale
Azure’s 34% annual growth has been fuelled by demand for compute capacity to support enterprise AI workloads.
The platform now accounts for 24% of the global cloud market, narrowing the gap with AWS.
Microsoft’s infrastructure expansion is central to this growth, with the company now operating the largest data centre footprint of any cloud provider.
The company’s Azure AI Foundry platform, which enables large-scale deployment of AI applications, has been adopted by 80% of Fortune 500 companies.
Microsoft says that more than 500 trillion tokens were processed via Foundry APIs this year, a sevenfold increase.
“When we look narrowly at just the number of tokens served by Foundry APIs, we processed over 500 trillion this year, up over 7X,” says Satya. “This is a good indicator of true platform diffusion beyond a few head apps and services.”
The growth in AI is also driving wider adoption of Microsoft’s data platform, Fabric.
Now used by more than 25,000 customers, Fabric has become central to managing data pipelines and analytics workloads within the company’s AI ecosystem.
Satya describes it as “the complete data and analytics platform for the AI era,” with Fabric revenue growing 55% year-on-year.
Enterprise cloud AI moves from pilot to production
Enterprise demand for AI-ready infrastructure is no longer confined to pilot programmes.
Companies such as Barclays and UBS have scaled their Microsoft 365 Copilot deployments from early trials to company-wide rollouts.
Barclays has rolled out the platform to 100,000 staff, while UBS expanded its deployment to all employees after an initial launch for 55,000 users.
- Microsoft reported a record fourth-quarter revenue of US$76.4bn, marking an 18% increase year-over-year
- The Microsoft Cloud division was the primary driver, with its quarterly revenue surging 27% to reach US$46.7bn
- Enterprise spending on AI from discretionary 'innovation' budgets has dropped from 25% to just 7%
This shift is evident in enterprise spending behaviour.
Last year, innovation budgets accounted for 25% of large language model investment.
That figure has dropped to just 7%, showing that AI is now a core part of operational IT budgets and infrastructure planning.
At organisations without a formal AI strategy, only 37% of executives reported successful AI adoption.
That number jumps to 80% at companies with a defined strategy, reinforcing the need for infrastructure readiness in scaling enterprise AI.
AI integration accelerates data centre growth
Microsoft’s strategy to tightly integrate OpenAI models across its product suite has positioned the company as a leader in AI-driven cloud services.
Its share of the foundation model platform market reached 39% in 2024.
To meet this demand, Microsoft is expanding capacity across its data centre network, which now totals more than 400 sites.
The company is continuing to build high-density data centre capacity to meet the compute demands of large models and enterprise inference workloads.
This includes GPU-accelerated racks and liquid-cooled environments designed to optimise power efficiency and performance at scale.
Microsoft’s security business is also expanding in parallel, with 1.5 million customers now using its tools across identity, access and threat protection.
The company added more than 100 new security features this year, including controls for AI agents via its Entra platform.
Satya concludes: “We are going through a generational tech shift with AI.
“And I have never been more confident in Microsoft’s opportunity to drive long-term growth and define what the future looks like.”
