Microsoft has announced plans to spend $7.5 billion on the expansion of digital and AI infrastructure in Canada over the next two years.
The funding will be used to increase computing capacity at Microsoft’s two primary Canadian Azure data centres in Toronto and Quebec City, Microsoft president and vice-chair Brad Smith said in a Dec. 9 blog post. He said the data centres will power modernized public services and AI innovation, and will lead to the creation of thousands of construction and permanent engineering and tech jobs.
“We’re building new digital and AI infrastructure needed for the nation’s growth and prosperity, with new capacity beginning to come online in the second half of 2026,” Smith said.
Microsoft said this new funding is part of $19 billion in spending that the company has allotted to Canada between 2023 and 2027. The company employs more than 5,300 across 11 Canadian cities.
“Since early 2023, these investments have already launched major infrastructure projects, created thousands of jobs, and partnered with Canadian innovators to drive sustainability and economic growth,” Smith said.
Canada’s Minister of Artificial Intelligence and Digital Innovation Evan Solomon said in the post that Microsoft’s new commitment shows “continued belief in Canada’s talent, economy and AI ecosystem.”
He said the investments will “complement the work we are doing to develop and scale the AI economy and grow the next generation of Canadian AI champions.”
Microsoft is also launching a plan that Smith says will protect Canada’s “digital sovereignty” by defending Canadian cybersecurity, keeping Canadian data within the country, strengthening privacy protections, supporting local AI developers, and ensuring the continuity of cloud and AI services.
The company will also launch a dedicated Threat Intelligence Hub to work alongside the Canadian government and law enforcement partners to track and halt organized criminal groups. Microsoft said Canada is increasingly being targeted by ransomware attacks, including from threat actors based in Russia, China, and North Korea.
Microsoft said it will challenge any governmental request for data pertaining to Canada’s government or commercial customers, provided there is a legal foundation for such action.
Microsoft director of public and legal affairs for France Anton Carniaux said in July that he could not guarantee that French citizen data would never be transmitted to U.S. authorities without explicit French authorization, because the U.S. Cloud Act can force companies to provide their customers’ data.
Prime Minister Mark Carney said in September he would ask the newly created Major Projects Office (MPO) to help develop a “Canadian sovereign cloud.” He said this would build computing capacity and data centres to “underpin Canada’s competitiveness, to protect our security, and to boost our independence and sovereignty,” but this has not yet been added to the official projects list.
Microsoft also announced on Dec. 9 that it would spend $17.5 billion on AI investments in India, building on a $3 billion commitment announced earlier this year, which would “help build the infrastructure, skills, and sovereign capabilities needed for India’s AI first future.” The four-year spending plan would give Microsoft the largest cloud-computing presence in India.
