Tech giant Microsoft made its latest data center land play with a deal to add 100 acres to its Arizona holdings.
Microsoft paid more than $131 million for the land in Goodyear near Citrus and Indian School roads from Chicago-based First Industrial Realty Trust in a deal that was recorded on May 29, according to Maricopa County property records.
The 100 acres Microsoft purchased are next to the company's more than 150-acre data center campus that's under development. For comparison, Microsoft paid $37.11 million for those 150 acres in an April 2019 deal, according to CoStar data.
Microsoft and other tech giants like Meta, Google parent company Alphabet and Amazon intend to collectively spend $680 billion this year alone on artificial intelligence networks, including real estate.
As of May, CoStar is tracking at least 60 existing data centers across Phoenix, totaling about 15 million square feet — with a development pipeline containing tens of millions of square feet more.
Microsoft declined to comment about what it will use the land for in a statement to CoStar News. First Industrial could not be immediately reached for comment.
US data center boom gets bigger
CoStar is tracking six data center buildings on Microsoft's 150 acres that are either existing, under construction or proposed. The company is a major player in west Phoenix cities like Goodyear and El Mirage, with 2 million square feet of existing or under-construction data centers, according to CoStar.
Microsoft bought a 39-acre site from First Industrial near its campus in 2023 for $41.28 million in a separate transaction.
As demand for artificial intelligence and cloud computing accelerates, construction costs for modern data centers have surged. Facilities these days require massive upfront spending on land, power support systems and specialized construction, with large campuses often running into the billions of dollars.
Industry estimates peg total capital needs at as much as $1 trillion over the next five years.
"In the U.S. alone, we project average spending on data center construction of more than $70 billion per quarter from 2025 to 2028," according to a report from S&P Global Ratings. "Numerous firms are hoping to enter the sector, and those with access to capital and experience in securing land, power and permits will be better positioned for success."
Billions of dollars in project development and tax revenue, as well as thousands of construction jobs, come with these plans — with no end in sight.
Microsoft's deal comes weeks after Japan-based NTT Data Group's plans for a seven-building, 2.2 million-square-foot campus in the suburb of Mesa received a recommendation of approval.