Big technology companies are reportedly increasing investments in artificial intelligence (AI) infrastructure, especially with a focus on expanding their presence in international markets.
The Wall Street Journal reported on Thursday, May 23 that Microsoft and Amazon have already allocated a combined total of more than $40 billion this year to AI-related and data center projects around the world.
Microsoft has outlined plans to invest over $16 billion in various countries, including France, Germany, Japan, Malaysia, Spain and Indonesia, the report said. Similarly, Amazon plans to invest $15 billion in Japan, $9 billion in Singapore, $5 billion in Mexico and $1.3 billion in France.
According to the report, the move to invest heavily in overseas AI infrastructure is driven by a desire to capitalize on growing global demand for AI technology.
The rationale for these investments is the need to build data centers in regions that are seeing an increased shift to cloud computing, to reduce processing times, and ensure data privacy and security, according to the report.
Wedbush analyst Daniel Ives told the WSJ that big tech companies are “spreading their wings” and looking to establish stronger footholds in international markets.
DA Davidson analyst Gil Luria predicts that tech companies will spend more than $100 billion on AI infrastructure this year, and that spending is expected to continue to grow as demand increases, the report said.
The report said Microsoft and Amazon are leading the way in expanding AI infrastructure overseas, but other tech giants are expected to follow. Google's parent company Alphabet has so far focused its AI and data center investments primarily in the U.S. But Ives predicted Alphabet, along with Meta Platforms, will aggressively expand overseas to keep up with the competition.
The report comes a day after chipmaker Nvidia said demand for its products is being driven by companies and countries transitioning from traditional data centers into “AI factories.”
“In the first quarter, we worked with more than 100 customers to build AI factories ranging from hundreds to tens of thousands of GPUs, with some reaching 100,000 GPUs,” NVIDIA executive vice president and chief financial officer Colette Kress said during the company's quarterly earnings call on Wednesday (May 22).
