Microsoft ramps up AI spending as profits and revenue surge
Microsoft said on Wednesday it continued heavy investment in artificial intelligence infrastructure, reporting capital expenditures of $37.5 billion in its most recent quarter, up about 65% year on year, largely driven by data center expansion, reports a Qazinform News Agency correspondent.
The company posted quarterly revenue of $81.3 billion, a 17% increase from the same period last year. Net profit reached $38.5 billion, up 60%. Both figures exceeded Wall Street expectations.
Microsoft’s Azure cloud business, widely seen as a key indicator of its AI momentum, grew by 39% during the quarter, slightly above market forecasts.
“We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises,” Chief Executive Officer Satya Nadella said in a statement.
Despite strong financial results, investor concerns persist over the scale of Microsoft’s AI-related spending. Company shares fell by as much as 7% in after-hours trading.
Chief Financial Officer Amy Hood said Microsoft would continue investing aggressively in AI infrastructure, noting that “our customer demand continues to exceed our supply.” She added that while spending would remain elevated, capital expenditures are expected to decline in the current quarter compared to the previous one.
Microsoft’s AI strategy remains closely linked to OpenAI, the developer of ChatGPT. According to company filings, Microsoft’s profits received a boost from its OpenAI investment during the quarter.
Executives also acknowledged that capacity constraints in AI computing would likely persist through fiscal year 2026. Nadella previously said the company plans to increase its total AI capacity by more than 80% over the next two years.
Meanwhile, Microsoft’s personal computing segment, including Xbox consoles and laptops, reported revenue of $14.3 billion, down about 3% amid weaker gaming sales.
Earlier, Qazinform News Agency reported that Moonshot AI had announced the launch of a new version of its artificial intelligence model, Kimi K2.5, which the company said has become the most powerful open-source AI model to date.
