Episode summary
Microsoft Plans Data Center Push to Triple Its Computing Power | Bloomberg Intelligence
Bloomberg Intelligence
· · 20 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Anurag Rana, Amanda Gordon, Jonathan Schanzer
Summary
The episode opens with a tech earnings discussion focused on Oracle and Adobe, then moves to Bloomberg News reporting that Microsoft plans to more than triple its data center capacity to about 38 gigawatts by 2032 from about 12 gigawatts now. The analyst says Oracle’s cloud business looked stronger than expected, but shares gave back gains as investors worried about broader data center expansion risks, not just Oracle itself. He also says Oracle is trying to limit capex pressure by asking customers to bring their own chips or hardware, while still expanding margins through cost cuts.
On Microsoft, the analyst says the company is spending close to $200 billion a year and is reshaping its data center infrastructure for GPU-heavy AI workloads, with some work outsourced to neo clouds. He argues Microsoft remains one of the biggest AI beneficiaries and should stay free cash flow positive, but says permits, power access, and local opposition to data centers are the biggest near-term risks across the sector.
The back half of the show shifts to the 25th anniversary of 9/11. A wealth reporter describes lower Manhattan’s transformation from a post-9/11 void into a mixed-use district with more housing, nightlife, and tech tenants, while a defense analyst says the attacks taught the U.S. to take emerging threats more seriously and to better understand jihadist ideology and terror financing.
Key takeaways
- The analyst says Microsoft’s data center buildout is massive, with capacity targeted to rise from about 12 gigawatts now to more than 38 gigawatts by 2032.
- The analyst says Oracle’s cloud growth is stronger than expected, but investors are weighing data center expansion uncertainty and lower gross margins.
- The analyst says Oracle is trying to reduce upfront capital burden by having customers bring their own chips or hardware.
- The analyst says permit delays, power constraints, and community opposition could slow AI infrastructure growth across Microsoft, AWS, Google, Oracle, and neo clouds.
- The wealth reporter says lower Manhattan now has a more diversified tenant base, with finance about a quarter of occupied space and tech and creative firms taking a larger role.
- The defense analyst says the U.S. still struggles to fully confront jihadist ideology and terror financing, including crypto and crowdfunding channels.
Notable quotes
“Microsoft plans to more than triple its data center capacity going from 38 gawatt. I have no idea what a gigawatt is, but it sounds big”
“they are asking customers to think about it bring your own chips or bring your own hardware this way they don't have to foot the bill ahead of time”
“the single biggest you could say obstacle right now or the overhang or not just Microsoft, but you can extend that to everybody whether it's AWS, Google, Oracle or the Neoclouds”
“About a quarter of the office tenants uh in lower Manhattan are finance related. Tech, AI, design, a lot of creative industries have come in”
“we needed to take these threats seriously when they first began to materialize”
How the episode opens
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Let's get to some of those tech earnings. Oracle and Adobe. Uh we got an analyst who follows those companies.
So that makes it very easy. Anoragana, he is a senior technology analyst for Bloomberg Intelligence. He's out there in Chicago.
Anorog, let's start with Oracle here cuz man, I saw, you know, their cloud business had a great number and that's what I thought people were focusing on. The stock traded up 9% at the open, but it's kind of giving it back. What's going on there?
Yeah, Ben, it's to be honest, it's a bit confusing because we really like the numbers. I mean I think the cloud business was improving even more than what uh the street was expecting and that's what had happened and I think the guidance for next quarter is also conservative. They should be able to beat that uh you know cloud numbers as well.
I I think what's happening over here is there is a little bit of you know uncertaintity about data center expansion. So you know it's probably that's more macro not related just to Oracle and I think that could be one factor. Um the one thing that I liked about the earnings was that they actually said they're not going to have to raise capex because that has been my biggest worry when it relates to Oracle is that do they have to keep on increasing capex.
One of the things they're doing is they are asking customers to think about it bring your own chips or bring your own hardware this way they don't have to foot the bill ahead of time.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- microsoft data centers
- ai and cloud computing shortage
- oracle earnings
- adobe earnings
- 9/11 anniversary
Companies and tickers mentioned
- MSFT
- ORCL
- ADBE
- Microsoft
- Oracle
- Adobe
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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