Microsoft pours billions into data center real estate nationwide, including Arizona

Much of Microsoft’s $88.2 billion in capital expenditures during the past fiscal year appears tied to the company’s largest land grab in over a decade, including for data center projects in Arizona.

Microsoft’s U.S. real estate footprint grew by 7 million square feet and added another 5 million square feet to its international presence during its 2025 fiscal year, which runs from July to June. It’s the most space Microsoft has added since Satya Nadella took over as CEO in 2014 and accelerated the cloud computing business.

That focus is as clear as ever. The Redmond-headquartered company’s capital expenditures in the 2025 fiscal year were more than double the previous two years combined.

Microsoft does not break down how its real estate footprint is divvied up between data centers and offices. However, with its headcount remaining steady at about 228,000 people, despite recent companywide layoffs, the tech giant appears to be using much of its real estate to build out data centers across the U.S., including in Arizona, Ohio, Texas, North Carolina and Texas. In the U.S., Microsoft bought 4 million square feet and leased 3 million in the 2025 fiscal year, according to the report.

“And while we brought additional data center capacity online this quarter, demand remains higher than supply,” Nadella told analysts last week.

In Arizona, Microsoft has targeted the West Valley for data center projects, specifically El Mirage and Goodyear. Last year, Microsoft acquired 283 acres in El Mirage for $258 million in two all cash transactions. The 283 acres, along Northern Parkway and Dysart Road, adds to the 150 acres Microsoft already owns for its data center project at the 1,400-acre LogistiCenter at Copperwing industrial complex.

El Mirage City Council approved a site plan amendment for a third 245,000-square-foot data center building on that site in April of 2024, according to previous Business Journal reporting.

In Goodyear, meanwhile, Microsoft is looking to expand its five-building, $1.5 billion data center campus. Microsoft has developed a 290,000-square-foot building, has almost completed a 250,000-square-foot facility and it comes seven years after the tech giant acquired the 272 acres near the Goodyear Airport for $42 million back in 2018.

As a result, Microsoft’s global real estate footprint sits at about 97 million square feet, about half of which it owns, according to its annual financial report released this month. It’s roughly the equivalent of 1,427 football fields used primarily for data centers.

Microsoft declined to comment for this story.

Microsoft is considered the second-largest cloud computing provider in the world, trailing only Amazon. In recent years, Amazon’s stronghold on a market it pioneered has diminished as more providers try to capitalize on the seemingly insatiable demand driven by artificial intelligence.

Amazon spent about $77.7 billion in cash in 2024, a 61% increase from 2023 when it spent $48.1 billion. Amazon has also been gobbling up real estate across the U.S., buying more than 10 million square feet last year and pushing its total leasing to 448 million square feet, largely for warehouses and data centers.

Nadella said last week that Microsoft has more than 400 data centers across 70 regions, a total he touted as the most of any cloud provider.

Those data centers, often located in more rural counties with cheap power, are becoming less popular due to a litany of factors, including environmental concerns and distrust in big tech companies. In Tucson, Arizona, the city council shot down a proposed $3.6 billion data center linked to Amazon earlier this month.

Also this month, a judge ruled that zoning changes paving the way for a huge data center project near Washington, D.C., were invalid.

What’s more, several Valley cities have enacted new zoning or other ordinances that could restrict the locations of future data centers in their areas.