AI data-center investment likely tops $700 billion as costs rise

Economists expect data-center spending to keep pushing inflation at least through year-end

Associated Press reported that investment in data centers to power artificial intelligence is likely to top $700 billion this year. The buildout has made memory chips, computer processors and other equipment, as well as electricity, more expensive.

Economists expect the spending to keep pushing up inflation at least through the end of this year. Microsoft is spending heavily on AI, but the $700 billion estimate covers the broader data-center buildout rather than the company’s own outlay.

Microsoft has been ramping up its AI capabilities for several years. In 2024, the company revealed a new class of AI-imbued personal computers. The devices centered on fusing its AI assistant, Copilot, into the Windows operating system for PCs, where Microsoft already had the eyes of millions of consumers.

In October 2025, Microsoft introduced Mico, a new artificial intelligence character depicted as a floating cartoon face shaped like a blob or flame. Mico embodies the software giant’s Copilot virtual assistant.

On Monday, Microsoft offered voluntary buyouts to 60,000 employees, or about 27% of its global workforce. The offer was available to eligible employees in Canada, India, the United Kingdom and the United States, according to Chief People Officer Amy Coleman’s Monday blog post.

“The Voluntary Exit Offer is new for us,” Coleman wrote. “We’ll learn from it. At the same time, we’ll keep helping people focus on the work that matters most, build new skills and, where it makes sense, find new opportunities across Microsoft.”

The voluntary program came after two earlier workforce developments. In May, Microsoft planned to offer buyouts to about 8,750 people, or 7% of its U.S. workforce, according to two people familiar with the plan who were not authorized to speak publicly. In July, the company said it was cutting 4,800 jobs, about 2.1% of its global workforce, including a large number of workers at its Xbox video game business. Unlike those July cuts, the current program offers voluntary exits.

Microsoft had approximately 223,000 full-time employees at the end of June and was scheduled to release its quarterly financial results Wednesday. Shares of Microsoft Corp., based in Redmond, Washington, hit an all-time high this month and rose about 1% Monday.

The $700 billion estimate and the 60,000-employee offer describe different scopes: one is the expected size of AI-related data-center investment, while the other is a voluntary exit program at Microsoft. The reporting places Microsoft’s workforce moves within a wider AI spending and product expansion, without assigning the aggregate total to Microsoft or establishing the buildout as the direct cause of those workforce decisions.