The rise of artificial intelligence (AI), a seemingly virtual technology, will first depend on physical infrastructure. This is the meaning of Microsoft’s announcements, this Monday, May 13, as part of Choose France, the summit created by Emmanuel Macron in 2018 to stimulate foreign investment.
The American firm will commit 4 billion euros in France by 2027, the vast majority in the construction of data centers (or data centers), in which its cloud computing services specializing in AI. “A record sum in 41 years of presence” in France, specifies The Express Corine de Bilbao, the president of Microsoft France, who justifies it by the cost of these complex buildings, which are very energy-intensive and use expensive materials. Starting with GPUs, these electronic chips dedicated to computer calculation, essential to the functioning of artificial intelligence.
This is a record sum, quite simply, for AI in France. In detail, the firm will expand two of its sites in the Paris region as well as in Marseille, and create a new center in the Grand Est, near Mulhouse. Enough to “increase the performance of AI solutions thanks to lower latencies”, underlines the manager. The proximity of data centers to its French and European customers also responds to security and data sovereignty issues. Microsoft is already a pillar of the cloud, holding the second global market share behind Amazon – which for its part invests 1.2 billion euros as part of Choose France – and ahead of Google. The three American players also share more than 70% of the French pie, estimated at more than 20 billion euros.
Microsoft is crisscrossing Europe
This historical domination in the cloud partly explains the significant size of the envelope released by Microsoft during Choose France. The other reason is of course the advent of generative AI, the latest age of AI, which allows machines to generate content automatically: text, images, computer code… Corine de Bilbao recalls the “very rapid” adoption of technology: three out of four office workers use it worldwide, according to the Work Trend Index 2024 study conducted by Microsoft and LinkedIn. With massive effects on the economic level: from 240 billion to 400 billion euros in benefits per year for France, according to the report of the French AI expert committee, published in the spring.
Above all, the father of Word, PowerPoint and Excel, modernized with artificial intelligence with Copilot, has for the moment bet on the right horse. Its partnership with the leading start-up, OpenAI, the creator of ChatGPT, the conversation agent which revealed to the entire planet the progress of generative AI, has boosted its results. Microsoft recently became the world’s largest market capitalization, at over $3 trillion, surpassing Apple. Azure, the cloud unit of the American giant, increased its revenue by 31% in the first quarter of 2024 compared to the previous year. Microsoft then reassessed its capital expenditures (Capex) to more than $14 billion over a quarter. This is what allows it, today, to invest so much money in data centers in France. But not only here. The company founded by Bill Gates has made similar investments in recent months in the United Kingdom (3 billion euros), Germany (3.2) as well as Spain (2), Japan (2. 7) and Malaysia (2).
This even more important bet on France can be explained by the country’s “assets” in AI, points out Corine de Bilbao, in particular its “rich” ecosystem, renowned for its high-level scientists in the field and certain nuggets in view. Microsoft has already invested several million euros in MistralAI and signed a partnership to distribute certain founding models of the French start-up on Azure. The boss of Microsoft France also discusses the qualities of the country’s infrastructure, in particular “the availability” of carbon-neutral energy. The company intends to rely “exclusively on renewables by 2025”. It will soon conclude its first long-term electricity purchase contracts, PPAs – Purchase Power Agreement – equipped with 100 megawatts of green energy.
Train “a million people” in AI
Under the gold of Versailles, this Monday, Emmanuel Macron should welcome Microsoft’s unprecedented investment. Infrastructure gaps to support AI growth are France’s – and Europe’s – Achilles’ heel. However, these colossal sums spent on the continent thwart the French strategy, which wishes to see the emergence of strong competitors to these American giants. “We must ensure the emergence of a diversity of economic players, particularly French and European,” urged the French experts on the AI committee, regarding the cloud. Last year, the Competition Authority also sounded the alarm, deploring “the high investments in hardware, bandwidth and storage to enter the market”, making the arrival of new actors.
The proof is there. At the end of 2023, Scaleway, from the Iliad group, invested 200 million euros for its AI cloud service and its computing capacities in France. Or 5% of the amount announced by Microsoft this Monday. With, in addition, an order for “only” a thousand latest generation GPUs, compared to 25,000 units for the Redmond firm. This shows how unbalanced the match is currently.
Still among the disillusionments, we must remember that data centers do not generate many jobs for their operation. And that their electricity needs are sometimes criticized by local authorities – Marseille, for example, wants to slow down installations on its soil. So, to reassure the political and economic world, Microsoft is simultaneously engaging in subjects that are less profitable at first glance.
The company plans to expand its training programs to raise awareness of AI to a million people, compared to 100,000 to date: professionals and individuals, including job seekers, with the help of France Travail. The final component consists of supporting 2,500 small and medium-sized French start-ups via the Microsoft GenAI Studio. “This initiative combines access to AI experts, cloud credits, personalized support and collaboration opportunities with Microsoft customers and partners in France,” informs the American company. Another form of investment. Longer term.