back to article AI spending spree continues as Microsoft commits $80B for 2025

The AI datacenter spending splurge looks likely to continue in 2025, with Microsoft alone saying it will invest $80 billion this year on building out infrastructure to train and deploy AI models. In a blog post that reads almost like a call to arms, Microsoft president and vice chair Brad Smith described AI as a "golden …

  1. Valeyard

    AI and Bitcoin

    The two things boiling the planet for nothing more than powering a hype machine. make me ashamed to be associated with IT (And yet tend to be the two topics people always bring up with anyone in IT)

    1. Anonymous Coward
      Anonymous Coward

      Re: AI and Bitcoin

      And if you ignore AI now or keep pointing out how shit/danagerous it actually is, you get ignored at work because they like pissing money on it and riding the hype train but fuck whits in charge with no IT knowledge. Mainly because one director (who shouldn't be in that role) is using CoPilot to write all his reports for him.

      1. Valeyard

        Re: AI and Bitcoin

        luckily at my work they've erred on the side of security and prevented any AI tooling to be used within the company

        still tarting our product up with useless AI offerings from a new overpaid AI team though when we're woefully short of regular devs

  2. Wang Cores

    I love the coprorate (sic) fine print

    "We have the opportunity as a country to equip all Americans* with the skills needed to use AI to pursue higher-paying jobs and more successful careers" = please daddy gubbmint give me tax dollars.

    *subject to terms and conditions - exceptions include anyone with a net worth less than $25 million USD, uses non-conforming pronouns, is disabled, etc.

    1. Steve Davies 3 Silver badge

      Re: a net worth less than $25 million USD

      Ah.... you mean those who are in Trump 2.0's cabinet are the only ones to qualify. Everyone else does not count.

    2. Snowy Silver badge
      Facepalm

      Re: I love the coprorate (sic) fine print

      If the AI is good then why would you need to be trained to use it? It should understand what you want/need and do it for you.

  3. Mentat74
    Mushroom

    Please... keep blowing up that balloon....

    Can't wait until it pops...

    1. Zippy´s Sausage Factory

      Re: Please... keep blowing up that balloon....

      The money Microsoft has invested feels like it's getting towards "bet the farm" and "too big to fail" level.

      If the AI bubble pops, I fully expect Microsoft to find themselves in serious financial problems very quickly. The resulting court cases are going to be legendary.

      Still, IBM could always dust off OS/2 for all the management people who react to the words "open source" the same way arachnophobes do to a picture of a tarantula. So there's that, I suppose.

  4. Richard 12 Silver badge

    So is it a tax writeoff?

    Or is it an attempt to get competitors to overcommit and go bust because Microsoft and Amazon can afford to burn the money?

    Even if there really is a market for this kind of 'AI', it's nowhere near large enough to ever pay back this kind of money.

    1. Like a badger Silver badge

      Re: So is it a tax writeoff?

      "Even if there really is a market for this kind of 'AI', it's nowhere near large enough to ever pay back this kind of money."

      You might think so, but I'm not so sure based on some rough numbers:

      a) MS revenues for 2024 near enough $250bn.

      b) $80bn investment needs say a return of 12%...

      c) requires an extra $10bn a year of sales (assuming next to nil operating cost),

      d) To wash its face and make a profit, MS have to persuade their customers to pay them 4% more.

      Last year MS revenues were up by just shy of 16%, year before 8%, year before 18%, so I'm seeing 4% for the dubious benefits of AI as being easily realised.

      I think your error is in assuming that there's any link between the spurious benefits AI might bring, and the amount credulous corporate fools can be persuaded to pay.

      1. Anonymous Coward
        Anonymous Coward

        Re: So is it a tax writeoff?

        A tax write-off AND the prelude for 50% raises for SatNad and his BOD.

        Which will in turn lead to price rises for everyone else. That's capitalism in 2025 with Trump in charge. Tax rises for us, new jets for them. Trump 2.0 Yay!

        This says everything.

        https://www.youtube.com/watch?v=fAuI1lvSBqc&pp=ygUJZG9sbGVtb3Jl

        How long after the 20th will he be allowed to carry on doing that is anyones guess.

      2. sierraskies
        Alert

        Monopolisation concerns

        Investment of this scale in AI is beyond most countries. How can the UK (or any other country than the US or China) - anything smaller than FAANG etc - compete with this level of investment (and its potential yield)? It seems like we're beyond the tipping point of potential competition. Non-FAANGs will need to focus on efficiency rather than scale?

    2. LucreLout

      Re: So is it a tax writeoff?

      Even if there really is a market for this kind of 'AI', it's nowhere near large enough to ever pay back this kind of money.

      Of course there is. If we assume AI only replaces call center jobs, and it clearly can start to do that now, then the spend discussed in this article gives roughly a 31k break even cost cut per former employee. If we deprecate that over a 5 year shelf life, then anything over about 6k per year in wage costs is all cheddar. Just from call centers.

      I'm not a fan of AI, I think we're going to prematurely push a lot of people out of work with it, which will predominantly affect Gen Z (just finished racking up uni debt for questionable degrees to do jobs that won't exist for long), though clearly not all of Gen Z. In the future it'll just be a productivity tool, but between now and then, lots of jobs are going to vanish in lots of fields.

      1. Richard 12 Silver badge

        Re: So is it a tax writeoff?

        Except that it's not good enough for call centres, and the break even point is more expensive than the humans.

        Anyone considering this is currently using a cheap offshore callcentre, as they're clearly wanting to cut costs more than is reasonable.

        The cheap offshore callcentres cost about $3k USD a year in wages per call handler. So assuming the callcentre supplier is using a 100% markup, the AI capex recovery alone is equal - nothing for running costs, let alone profit.

        (And yes, these pay figures are pretty scarily low)

  5. Anonymous Coward
    Anonymous Coward

    Can I just confirm?

    Is this AI as in LLM and chatbots, or is it the more useful pattern matching AI used in hospitals etc to detect things like cancerous cells?

    1. Steve Davies 3 Silver badge

      All the more power to...

      FecalBarf, Xshitter and TroothFarcical.

      Their bots will post memes of themselves, chat with other bots and the whole internet will collapse in a heap as they alternative switch between praise and slagging each other bot off.

      It will eat itself (hopefully) and the rest of social media.

      1. ecofeco Silver badge

        Re: All the more power to...

        To re-tool an old saying, "Let's chat! Have your bot call my bot."

  6. Neil Barnes Silver badge

    the skills needed to use AI to pursue higher-paying jobs and more successful careers.

    But at the same time aren't they saying to the bosses that AI will allow them to do away with their workers?

    1. LucreLout

      Re: the skills needed to use AI to pursue higher-paying jobs and more successful careers.

      Both statements can be true, to some extent at least.

      Its highly likely simple administration roles, such as those found in call centres and much of the public sector back offices, will be replaceable with a suite of AI agents. Its equally likely that doing so will throw off some much better paid much higher skilled roles in training and tuning those agents, just in lower volumes.

      If you're one of those people that can "complete the assigned tasks in 2 or 3 hours" then netflix the day away, then this is your comet.

    2. Pascal Monett Silver badge

      Re: the skills needed to use AI to pursue higher-paying jobs and more successful careers.

      I'm not sure paying tens of billions to do away with a few tens of millions in salary is a wise investment.

      But hey, I'm only self-employed, so what do I know ?

  7. amanfromMars 1 Silver badge

    Winner Takes All in an Existential Threat See Scape .... Live Operational Virtual Environment

    You gotta speculate to accumulate, right? May the Best of the Best of AIs Win Win ..... as they surely most definitely undoubtedly will, and as IntelAIgently Designed by Advanced Virtual Machines to do.

    What next to do to not crash global markets and prevent revolutions and dissuade radical pogroms and incendiary programs is the next small step for Man and Mankind requiring giant leaps from Man and Mankind into what is quite clearly evident to any and all akin to Alien Invaders, be the Great Future Unknown Unknown.

    1. ecofeco Silver badge

      Re: Winner Takes All in an Existential Threat See Scape .... Live Operational Virtual Environment

      Glad to see you back, Man from Mars.

  8. Jou (Mxyzptlk) Silver badge

    Spend it on fixing bugs

    instead of feeding that marketing bubble even more.

    1. Anonymous Coward
      Anonymous Coward

      Re: Spend it on fixing bugs

      Stop talking sense. That is not allowed under the Musk/Trump reich

  9. PhilipN Silver badge

    Can't help wondering about the comparison

    How much is spent every year in researching cures for cancers, diabetes etc.

    The search for a cure for a crazy planet never gets into the lab.

    1. werdsmith Silver badge

      Re: Can't help wondering about the comparison

      AI is already helping with that research.

  10. Boris the Cockroach Silver badge
    Unhappy

    Who made

    the most from the various gold rushes?

    The people selling spades (along with other propecting stuff)

    This 'ai' bubble will go pop hopefully, just after the last worker has been replaced and no one has any money to buy anything.. let alone a luxury like a computer.

  11. Anonymous Coward
    Anonymous Coward

    Hi, I’m your actual real-life AI buddy, thanks for building me

    But first a question.

    With those same hundreds of billions of dollars why didn’t you end world hunger, conflict and climate issues?

    1. Anonymous Coward
      Anonymous Coward

      Re: Hi, I’m your actual real-life AI buddy, thanks for building me

      Such crazy talk is not permitted by President Musk.

      Junior Assistant Trump will tweet about this.

  12. druck Silver badge

    AI: You better get used to writing names on coffee cups.

    "AI offers not only new tools for people's work but also new ways to help people learn almost anything. We have the opportunity as a country to equip all Americans with the skills needed to use AI to pursue higher-paying jobs and more successful careers.

    If your job is a meaningless pusher of paper, or low quality junior coder and you've learnt you can bunk off early by getting AI to churn out something that vaguely resembles what you are supposed to be doing, you are going to be in for a shock if you think you'll be paid more or have a successful career. If you can get away with this, it won't be long before the company realises and replaces you all together.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like