Microsoft Set To Pour $7.16B Into New Data Centres In Spain's Aragon: Report

Microsoft Corp. MSFT is reportedly planning a $7.16 billion investment for the construction of new data centres in Aragon, a northeastern region of Spain.

What Happened: Microsoft has applied for a permit to construct data centres on the outskirts of Zaragoza city, Reuters reported on Friday. The regional government of Aragon confirmed this information, following a report by the local newspaper El Heraldo.

The investment from Microsoft will be distributed over a span of ten years, according to the regional government. Microsoft, which recently announced a $2.25 billion investment in Madrid data centres, declined to comment on the Aragon plans.

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This move by Microsoft comes after its main competitor, Amazon’s cloud computing unit AWS, announced a $16.8 billion investment over the next 10 years to build data centres in Aragon last month.

Aragon, with its extensive wind power capacity, is emerging as a significant cloud computing hub within Europe. Zaragoza, Spain’s fifth-largest city, is a logistics and transportation hub, located halfway between Madrid and Barcelona, and in the main trade corridor connecting the Iberian Peninsula to France and Europe.

Microsoft is yet to respond to the queries sent by Benzinga.

Why It Matters: Earlier this year, Microsoft announced its plans to significantly enhance its artificial intelligence (AI) and cloud infrastructure presence in Spain with a $2.1 billion investment over the next two years. This followed a $3.45 billion AI-focused investment in Germany.

However, Microsoft’s rapidly expanding cloud computing services have faced scrutiny. In May, a Spanish startup group filed a complaint against the tech giant's cloud practices, alleging that Microsoft is using its dominant position in operating systems and traditional productivity software markets to force the adoption of its Azure cloud.

Price Action: At the time of writing, Microsoft was trading at 0.63% lower on Friday’s pre-market at $438.81 after closing at $441.58 on Thursday, according to Benzinga Pro.

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This story was generated using Benzinga Neuro and edited by Pooja Rajkumari