Microsoft to invest more than $7.5 billion in Canada to boost AI infrastructure

Tech analyst Carmi Levy says tech companies must build bigger data centres to power artificial intelligence infrastructure.

Microsoft said on Tuesday it was investing more than $7.5 billion (US$5.42 billion) in Canada over the next two years, its latest in a series of investments in artificial intelligence infrastructure globally.

New capacity under the investment will begin to come online in the second half of 2026, Microsoft said, adding that its total estimated investment in Canada amounts to $19 billion between 2023 and 2027.

Microsoft has pledged hefty investments worldwide this year, as the company races to secure more cloud computing capacity to meet the surging demand for AI workloads.

Big Tech peers Amazon and Google-parent Alphabet have also pledged several multibillion-dollar commitments for data-center infrastructure this year, both within the U.S. and in international markets.

Microsoft also said it would expand its Azure Local cloud offering in Canada. It is also partnering with Canadian AI startup Cohere to offer the firm’s advanced AI models on its Azure platform.

The company is also launching a dedicated “Threat Intelligence Hub” in Canada to focus on cybersecurity protection and AI security research, and work with the Canadian government and lawmakers to track threat actors and organized crime.

Microsoft currently has more than 5,300 employees across 11 cities in Canada.

Last month, Microsoft announced plans to invest US$10 billion in AI infrastructure in Portugal as well as US$15 billion in the United Arab Emirates.

Big Tech is under growing investor pressure to show that their hefty investments in AI are paying off, as surging valuations of companies and a web of circular investments fuel concerns of an AI bubble.

The Windows-maker reported a record capital expenditure of nearly US$35 billion for its fiscal first quarter in October and warned that spending would further increase this year. It has predicted it would remain constrained on supply at least until the end of its current fiscal year in June 2026.

($1 = 1.3841 Canadian dollars)

(Reporting by Deborah Sophia in Bengaluru; Editing by Vijay Kishore and Anil D’Silva)