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Microsoft reported fiscal 2026 first-quarter capital expenditures of $34.9 billion, with plans to increase AI capacity by 80% and nearly double its datacenter footprint over the next two years. The company is investing over $7 billion in the Fairwater AI datacenter in Mount Pleasant, Wisconsin, set to open in early 2026, covering 315 acres and equipped with hundreds of thousands of Nvidia GB200 GPUs.
Additionally, Microsoft plans a $10 billion investment in Sines, Portugal, partnering with Start Campus and Nscale to deploy 12,600 next-generation Nvidia GPUs. Despite these expansions, Azure will remain capacity-constrained through at least the end of fiscal 2026, with remaining performance obligations increasing over 50% to nearly $400 billion.
Amazon and Google are also expanding their datacenter infrastructure, with Amazon completing its $8 billion Project Rainier in Indiana and Google announcing multi-billion-dollar investments in West Memphis, AR, and Belgium. All three companies are navigating challenges in balancing capital expenditures against profitability.
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