Microsoft targets 38-gigawatt data center capacity by 2032

Microsoft is reportedly planning a massive expansion of its global data center capacity, aiming to increase its footprint from approximately 12 gigawatts to more than 38 gigawatts by 2032. This aggressive infrastructure buildout is driven by surging demand for AI compute and Azure cloud services, which saw a 43 percent year-over-year revenue increase in the company’s fiscal fourth quarter.

As part of this transition, the company expects the portion of its capacity dedicated to AI-specific chips to grow from roughly 2 gigawatts to approximately one-third of its total 38-gigawatt target. To support this growth, Microsoft has entered a 20-year agreement with Constellation Energy to utilize the restarted Three Mile Island Unit 1.

The expansion comes as Microsoft faces capacity constraints that have impacted various business segments, including GitHub and Xbox cloud streaming. To fund these initiatives, the company anticipates significant capital expenditures, with estimates reaching approximately $175 billion for calendar year 2026.