We compute the capacity of wireless ad hoc networks when all the nodes in the network are endowed with M antennas. The derivation is based on a new communication scheme for wireless ad hoc networks utilizing the concept of cooperative many-to-many communications, as opposed to the traditional approach that emphasizes on one-to-one communications. We show that the upper bound average asymptotic capacity of each cell is 2/spl pi/P/sub t/MC/sub cell/[1-exp(-C/sub cell///spl theta/)], for network parameters C/sub cell/ /spl ges/ 1, 0 /spl les/ /spl theta/ /spl les/ 1, and transmit power P/sub t/.