SYDNEY, AUSTRALIA – APRIL 23: Microsoft Chairman and CEO Satya Nadella speaks on stage during the Microsoft AI Tour at the TikTok Entertainment Center on April 23, 2026 in Sydney, Australia. Mr Nadella, on his first visit to Australia since 2019, spoke to business leaders, developers and government representatives at the Microsoft AI Tour in Sydney on April 23, outlining his vision for Australia to become not just a consumer market for Microsoft products, but a key hub for AI innovation. (Photo by George Chan/Getty Images)
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microsoft announced on Thursday a A$25 billion ($18 billion) investment in Australia’s digital infrastructure. This will see the tech giant partner with Canberra on initiatives across cybersecurity, workforce upskilling and artificial intelligence development.
Microsoft has touted its “largest ever” investment in Australia, saying it will increase adoption of its Azure cloud computing infrastructure in the country by more than 140% by the end of 2029.
The partnership will also see Microsoft expand on existing partnerships with government agencies such as Australia’s signals intelligence agency, the Australian Signals Directorate, and the Department of Home Affairs to help secure critical infrastructure and train 3 million Australians in the use of AI by 2028.
Microsoft’s agreement on Thursday builds on its A$5 billion commitment to Australia in October 2023, which the company said at the time was its “single largest investment” in its 40 years of operations in the country.
“We want all Australians to be able to benefit from AI. Our national AI plan is about capturing the economic opportunities of this transformative technology while protecting Australians from the risks,” Australian Prime Minister Anthony Albanese said at a press conference alongside Microsoft CEO Satya Nadella as part of the Sydney leg of Microsoft’s AI Tour.
Canberra has been proactive in expanding its domestic AI capabilities. In December 2025, the government launched the National AI Plan, pledging to “build a more competitive, productive and resilient AI-enabled economy”.
Beyond Microsoft, Canberra is attracting investment from other AI hyperscalers. In July, Amazon Web Services has committed to invest A$20 billion in Australia, and in December Australia announced an A$7 billion investment from OpenAI.
Australia touts its advantage in attracting foreign AI investment, citing its “strict but tech-friendly” regulatory environment. The country ranks second after the United States in global data center investment in 2024, according to a ranking released by Knight Frank.
Microsoft executives signed a memorandum of understanding on Thursday, pledging to follow the Australian government’s recently announced expectations for data center and AI infrastructure development. This includes a commitment to prioritize Australia’s national interests and ensure sustainable water use.
In March, Anthropic CEO Dario Amodei met with Mr Albanese and signed a similar memorandum of understanding for cooperation on AI safety research, calling Australia a “natural partner for responsible AI development”.
As of October 2025, Microsoft operates three data centers across Australia, with three more under construction in Melbourne and Sydney.
The Washington, D.C.-based tech giant’s stock has fallen about 20% in recent months from its October 2025 high.
At the end of March, Microsoft had its worst quarter on Wall Street since 2008. Analysts told CNBC that the company’s struggles are related to the broader market reaction to AI’s disruption to software stocks.
