Microsoft has committed more money to building out Australia’s digital infrastructure, with a fresh $18 billion investment in the country over the next three years.
The fresh investment aims to expand adoption of the Azure cloud computing platform and enable greater use of the company’s AI model, Copilot. Alongside new partnerships with state services, Microsoft plans to work with existing collaborators such as the Australian Signals Directorate and Department of Home Affairs.
The software giant invested over $3 billion in the country in 2023, with much of the same focus on collaborative state deployments and training Australians in cloud computing and AI.
“We want to make sure all Australians benefit from AI,” Australian Prime Minister Anthony Albanese said, speaking at a press conference alongside Microsoft CEO Satya Nadella. “Our National AI Plan is all about capturing the economic opportunities of this transformative technology while protecting Australians from the risks.”
The country’s National AI Plan has targeted investment from global hyperscalers such as Microsoft, Amazon, and Google. It is one of the most competitive markets for these AI deployments, with both Western AI models like GPT and Claude competing with Chinese open-source models from DeepSeek and Alibaba.
It is somewhat surprising that Microsoft is as keen on increasing its spend in the region, given the Australian Competition and Consumer Commission (ACCC) took the tech giant to court over misleading 365 subscription costs. While the court case has not yet settled, Microsoft has said it would provide refunds to those affected and change its policies.
Microsoft on an infrastructure spending spree
Outside of the huge amount of capex being spent in the United States, Microsoft is also doubling down on countries that are working with it on infrastructure deployment. Earlier this year, it announced a similar $10 billion investment to scale AI, cloud and cybersecurity operations in Japan, a similar doubling down on a previous investment.
The company is also working with SpaceX on expanding internet access to several African countries, with the partnership aiming to build hundreds of community hubs in places like Kenya.
In total, Microsoft is expected to increase its capital expenditures by over 50% in 2026, with almost all of it going to AI and cloud infrastructure expansion. In its home country, it has taken over abandoned sites from OpenAI and Oracle to capture more data centre capacity, and has also partnered with AI-specialist infrastructure services Nebius, CoreWeave, and Nscale to provide even more capacity to AI model developers.
The current investments in Australia and Japan allow the company to build out its infrastructure while also marketing its own AI services to public sector institutions. Microsoft has recommitted to providing leading-edge AI models to businesses by the end of next year.
Read our prior coverage of other tech giants’ AI investments or read about the IMF’s prediction that AI is propping up the global economy.