Microsoft commits record $25b in Australia’s booming AI sector

Microsoft has pledged $25 billion to expand its Australian AI, cloud and cybersecurity infrastructure over the next four years — the largest investment ever by a technology company in the country.

The investment follows Microsoft’s $5b spend on local data centres last year and comes amid surging demand for artificial intelligence and cloud computing services. It eclipses rival Amazon Web Services’ commitment to invest $20b in Australian data centres over the same period.

“Australia has an enormous opportunity to translate AI into real economic growth and societal benefit,” said Microsoft chair and chief executive Satya Nadella.

The investment will expand Microsoft’s Azure AI supercomputing and cloud capacity, while deepening collaboration with Home Affairs and the newly established Australian AI Safety Institute, which ensures the country’s AI growth is safe and sovereign.

Microsoft will expand the Microsoft–ASD Cyber Shield, a government cybersecurity partnership, and train three million Australians in workforce-ready AI skills by 2028.

The skills pledge builds on Microsoft’s earlier goal to train one million people across Australia and New Zealand by 2026, which the company says it has already met.

The investment is underpinned by a memorandum of understanding with the Federal Government, aligning the company with new expectations for data centre and AI developers covering national interest, clean energy, water use, skills and jobs and local research.

“We want to make sure all Australians benefit from AI,” said Prime Minister Anthony Albanese.

“Our National AI Plan is all about capturing the economic opportunities of this transformative technology while protecting Australians from the risks,” he said.

“Microsoft’s long-term investment in our national capability will help deliver on that plan – strengthening our cyber defences and creating opportunity for Australian workers and businesses.”

Business groups were onboard, with the Business Council of Australia chief executive Bran Black calling the investment a “gamechanger”.

“This is exactly the kind of investment we need to capture the economic opportunity of the AI era,” he said.

The Tech Council of Australia was also giddy, with interim chief executive Lucinda Longcroft describing it as “a strong endorsement of Australia’s role in the global technology ecosystem”.

New analysis from EY-Parthenon estimates Microsoft contributed $36b to the Australian economy in the 2025 financial year, supporting the equivalent of more than 186,000 full-time jobs.

Microsoft has also committed to matching its energy use with 100 per cent renewable electricity and becoming water-positive by 2030.