Microsoft has said it will invest AU$25 billion (US$18bn) to expand AI and cloud infrastructure and operations in Australia by the end of 2029.

Announced by CEO Satya Nadella during Microsoft's AI Tour in Sydney, the investment will expand its Azure computing infrastructure in the country by more than 140 percent.

The increased investment builds on a previous AU$5 billion (US$3.18bn) pledge to expand Microsoft's infrastructure footprint in Australia made in late 2023. At the time, the company described it as its "single largest" Australian investment in its 40-year history in the country.

As part of the pledge, Microsoft has signed a Memorandum of Understanding (MoU) with the Australian Government. Under the MoU, Microsoft has said it will meet the newly established "expectations for data centers and AI infrastructure developers," which includes the agreement to cover transmission and infrastructure costs related to data centers, offering Australian organizations favorable terms, and supporting energy transition.

As part of the latter, Microsoft will increase renewable energy capacity in the country in line with its own 2030 carbon-negative goals.

The company will also expand its collaborations with government entities, including the Australian Signals Directorate and the Department of Home Affairs, to secure critical infrastructure, and will train three million Australians on the use of AI by 2028.

Speaking during a press conference, Australian Prime Minister Anthony Albanese said: "We want to make sure all Australians benefit from AI. Our National AI Plan is all about capturing the economic opportunities of this transformative technology while protecting Australians from the risks."

As of October 2025, Microsoft owned and operated three data centers in Australia and was constructing three further facilities around Melbourne and Sydney.

The company has cloud regions in Canberra, New South Wales, and Victoria in Australia, leasing capacity from third-party data centers across the country.

In July 2025, Microsoft signed a five-year AU$495 million (US$324.71m) deal with Australia's Department of Defence that would see the department using the company's cloud computing capabilities.

Google was previously reported to be considering an AU$20 billion (US$14.2bn) investment in Australia, but was concerned about the country's high taxes for companies with a permanent establishment.

Amazon Web Services is building a data center campus for Australia's government to handle top-secret information, as announced in July 2024. The data center and cloud system will be developed as a partnership between AWS and the Australian government, with the latter to invest AU$2 billion (US$1.3bn) in the new system over the next ten years.