Microsoft Commits $25 Billion to AI Expansion in Australia

Microsoft will invest in AI infrastructure in Australia over three years under a new agreement with the federal government.

Chairman and CEO of Microsoft Satya Nadella speaks on stage during the Microsoft AI Tour at TikTok Entertainment Centre in Sydney, Australia on April 23, 2026.George Chan/Getty Images

Microsoft will invest $25 billion ($17.9 billion) over three years to expand artificial intelligence capabilities in Australia, including data centres, job training, and cybersecurity.

The company has also signed a Memorandum of Understanding (MoU) on AI with the federal government, under which it will follow new national guidelines for data centres and AI infrastructure released in March.

Industry and Science Minister Tim Ayres said the investment would support Australia’s AI-driven economy and help train three million workers.

“This MoU outlines how the Australian government and Microsoft will work together to strengthen AI infrastructure, improve safety measures and encourage adoption across the economy,” he said.

Microsoft’s CEO Satya Nadella announced the commitment at a Sydney event alongside Prime Minister Anthony Albanese.

He said the new investment would help Australians build AI tools and support businesses, and ensure the technology is used across multiple industries.

‘‘Australia has an enormous opportunity to translate AI into real economic growth and societal benefit,’' Nadella said.

‘'That is why we are making our largest investment in Australia to date.”

He did not provide details on how many data centres Microsoft would build or where they would be located.

In 2023, Microsoft announced a $5 billion investment over two years to expand its data centre network from 20 to 29 Australian sites. It has also partnered with local organisations to deliver digital skills training through its Datacentre Academy.

Separately, the company has outlined plans to invest up to $20 billion by 2029 to expand AI capability and data centre infrastructure in Australia.

Albanese said the new investment would help more Australians access AI.

‘‘We want to make sure all Australians benefit from AI,’' he said.

“Our National AI Plan is all about capturing the economic opportunities of this transformative technology while protecting Australians from the risks.'’

The agreement includes closer work with federal agencies, including Home Affairs, and will expand Microsoft’s cybersecurity services beyond the Australian Signals Directorate to other parts of government.

Belinda Dennett, CEO of Data Centres Australia, said the investment showed confidence in Australia as a destination for AI infrastructure.

‘‘This investment in new digital infrastructure provides Australia with the opportunity to benefit from and to lead in the most profound technological shift we have ever seen,’' she said.

‘‘It will enable digital services for Australians and capture more of the AI value chain locally.’’

According to a recent McKinsey report, Australia could become a digital infrastructure hub in the Asia-Pacific region, but would need $190 billion in investment to increase computing capacity from 1.5 to 5 gigawatts by 2030.