Microsoft Corp. is still suffering from a computing capacity crunch despite massive spending on data centers, a scenario that weighed on the company’s closely watched Azure cloud unit.

Microsoft has reported an 18% increase in quarterly sales, reaching $77.7 billion, surpassing Wall Street expectations

Meta and Microsoft said they planned to spend even more on AI in 2026, and fears of a bubble keep mounting.

The company’s A.I. offerings are driving “real-world impact,” Satya Nadella, Microsoft’s chief executive, said in a statement. “It’s why we continue to increase our investments in A.I. across both capital and talent to meet the massive opportunity ahead.”

Microsoft has pulled this off while relaxing its grip on Open AI by, for instance, letting it use alternative sources of computing power so long as it asks first. On October 28th Microsoft loosened the setup once again,

Microsoft and OpenAI unveil a deal extending IP rights, adding independent AGI verification, and giving both sides more freedom while maintaining Azure ties.

Microsoft posted its fiscal first-quarter earnings after Wednesday's closing bell, joining Alphabet and Meta on a packed afternoon for Big Tech results. While the headline results impressed, Microsoft ended up spending way more on capital expenditures like chips than analysts were anticipating.

Microsoft's AI infrastructure spending to meet growing cloud services demand is outpacing Wall Street expectations, deepening investor fears about the costs of sustaining the boom. The technology giant reported a record capital expenditure of nearly $35 billion for its fiscal first quarter on Wednesday and warned spending would rise this year,