Microsoft adds over $130 billions in new data center leases, plans to more than double computing power

Microsoft plans to expand its data center capacity by more than twofold, a move that may help the company alleviate its computing power shortage.

According to regulatory filings submitted by Microsoft on Wednesday, the software giant added over $130 billion in data center leases in a single quarter and plans to increase its global data center capacity from about 12 gigawatts to more than 38 gigawatts by 2032—an expansion of over twofold.

As of the end of the quarter on June 30, the company's total outstanding lease commitments reached $329.1 billion, a significant jump from $196.6 billion in the previous quarter, marking a single-quarter increase of over 67%, which is the largest quarterly leasing surge in the company's history.

Microsoft explained in the filing that these leases are "mainly" for data centers, with some requiring "specific contractual conditions" to be met. Microsoft’s Head of Investor Relations Jonathan Neilson stated:

This truly reflects the continued strong demand we are seeing, and these leases will serve customer needs for many years to come.

Behind the expansion of computing power lies Microsoft's longstanding capacity bottleneck. Whether this large-scale expansion will be deployed in time will directly impact Microsoft’s ability to maintain its market share in cloud computing and AI businesses.

Part of the reason for Microsoft’s large-scale expansion is to make up for previous business losses caused by insufficient capacity.

Due to tight data center supply, Microsoft has imposed restrictions on new cloud service subscriptions in core markets such as the United States and Europe. Reports citing informed sources revealed that some customers, unable to obtain additional capacity in their desired regions from Microsoft, turned to competitors instead.

Microsoft suspended some leasing activities for most of 2025. The recent restart and acceleration of leasing have been interpreted externally as the company regaining confidence in its demand outlook.

The large-scale expansion is underpinned by continuously rising capital expenditures. Microsoft’s capital expenditure in its most recent fiscal year reached $145 billion, and analysts expect this figure to continue growing over the next several years.

At the same time, Microsoft and its peers must also contend with public pressure. Polls show that a majority of Americans oppose the construction of data centers in their own localities, creating additional obstacles for site selection and approval.