Microsoft to splurge $3.2bn to beef up Swedish cloud and AI ops

It's the single biggest investment the company has made there.

Graphics processing units (GPUs) – which provide the requisite boost to compute power to handle demanding AI workloads – appear to be right at the top of Microsoft's shopping list. It plans to deploy no fewer than 20,000 of these to upgrade its three data centre regions, which are in Sandviken, Gävle and Staffanstorp.

"This announcement is about more than just technology. It is a commitment to ensure broad access to the tools and skills needed for Sweden's population and economy to flourish in the AI era," said Brad Smith, vice chair and president at Microsoft.

Indeed, Microsoft has also pledged to provide AI competence training for some 250,000 people – equating to 2.4 percent of the population – over the next three years. It will be provided through technical education and vocational training for students; tailored schemes for retraining in industry-specific professions; and expert training in AI for developers.

It will be coordinated by Microsoft via an AI Insights Council, comprised of academics, and leaders from the private and public sectors.

"AI is a tech transformation that should be seen as a multiplier or catalyst. AI will not only have an impact on how we run businesses, but will also help accelerate development in a range of other technology areas," said Sweden's Prime Minister Ulf Kristersson.

"The morning news here at Microsoft's headquarters in Stockholm is an example of how we want to attract investment to Sweden in order to increase Swedish growth and competitiveness," he continued. "It is part of the strategy going forward when, after successfully fighting inflation, we enter a new phase, an investment phase."

Microsoft was also at pains to point out that its expansion programme ticks those all-important eco-boxes.

Its Swedish data centres already run on 100 percent fossil-free electricity, with hourly energy-matching – where energy consumption changes based on output from renewable sources. They also reuse rainwater for humidity-based cooling – which is apparently more efficient than traditional water cooling – and Microsoft is piloting the use of back-up batteries as opposed to diesel generators.

Microsoft has pledged to continue in this vein during the course of its expansion programme. It has invested in 1,000 MW of renewable energy production in Sweden, 800 MW of which is already up and running. It has also just embarked on its first hybrid wind and solar project, which is due to come online by 2025.

Sweden is the latest stop on Microsoft's cloud and AI world tour, as it aims to be at the vanguard of generative AI (GenAI) adoption in all four corners of the globe.

Last month, Microsoft announced plans to plough another $2.9 billion into its cloud and AI infrastructure in Japan. A little over six months ago, it made a similar commitment in Australia worth $3.3 billion.

GenAI is now not-quite-single-handedly driving the overall cloud market.

According to Synergy Research, AI helped to propel Q1 cloud spending to $76 billion, up 21 percent on last year. The same research firm also revealed that hyperscale data centre capacity has doubled over the last four years, and is expected to double again over the next four.

It's a GenAI gold rush – let's hope it doesn't mutate into a bubble.