Microsoft announced plans Tuesday to invest $7.5 billion in Canadian data centres over the next two years.

“Today, we are announcing the most important commitment in Microsoft Canada’s history,” wrote Brad Smith, the global tech giant’s vice-chair and president in a blog post.

The allocations are part of the $19 billion that the firm will invest in Canadian AI infrastructure during a five-year period that began in 2023.

“We’re building new digital and AI infrastructure needed for the nation’s growth and prosperity, with new capacity beginning to come online in the second half of 2026,” said Smith.

In conjunction with the $7.5-billion investment, Microsoft is launching a new five-point plan to promote and protect Canada’s digital sovereignty. Several tech industry leaders have expressed concerns that international investment in Canadian data centres compromise Canada’s data sovereignty and security, putting it at risk of being controlled by foreign entities and governments that would put their interests first as well as rogue players that hamper cybersecurity.

“Digital sovereignty has become a more important issue around the world,” Smith told The Globe and Mail during a trip to Ottawa on Tuesday for the investment announcement. “What we’re seeing in Canada is two very distinct things. One is the change in the dialogue with the United States. The other is the increase in activity from around the world that’s targeting Canada.”

The federal government’s strained relationship with the U.S. fraught relationship with U.S. President Donald Trump’s administration is forcing Canadian companies and governments to reassess their reliance on American tech giants, including Microsoft, for crucial digital services, Smith told the Globe.

Cyberthreats targeting Canadian entities are also boosting the need for stronger cybersecurity measures, he added in the interview with the Globe.

In his blog post, Smith vowed that Microsoft will “rigourously defend” the uninterrupted operation of cloud services for Canadian government customers.

“If ever confronted with an order to suspend or halt operations in Canada, we will pursue every available legal and diplomatic avenue—including litigation—to protect access to critical infrastructure,” said Smith. “Our track record demonstrates our resolve to stand up for customer rights.”

Microsoft has long protected Canada’s digital privacy and will continue to do so. The company will build on that strong foundation by introducing new technical capabilities and legal measures in 2026.

Image: Microsoft