Microsoft forced to up AI spending by $25 billion to cover hardware price rises — says it 'remains confident in the return on these investments'
Microsoft has increased its AI-related capital expenditure by $25 billion due to rising hardware costs and global chip shortages, bringing its projected 2026 capex to around $190 billion. Despite the added spending, the company remains confident in the return on its investments, citing strong demand for AI and cloud services. Azure revenue grew 40% year-over-year, and Microsoft 365 Copilot now has over 20 million paying customers.
- ▪Microsoft reported an 18% rise in revenue to $82.9 billion for the most recent quarter, with Microsoft Cloud revenue up 29% year-over-year.
- ▪The company's AI business has an annual revenue run rate of $37 billion, a 123% increase from the previous year.
- ▪Two-thirds of Microsoft's previous quarter capex was allocated to CPUs and GPUs, which are considered short-lived assets.
- ▪Microsoft expects to spend $40 billion on hardware and data centers in the next quarter, up from $31.9 billion in the prior quarter.
- ▪The company cited a $627 billion commercial backlog, up 99%, as evidence of strong forward demand for its cloud and AI offerings.
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Pro Microsoft forced to up AI spending by $25 billion to cover hardware price rises — says it 'remains confident in the return on these investments' News By Craig Hale published 30 April 2026 Microsoft capex is being hit by rising prices When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. (Image credit: Future) Copy link Facebook X Whatsapp Reddit Pinterest Flipboard Threads Email Share this article 0 Join the conversation Follow us Add us as a preferred source on Google Newsletter Subscribe to our newsletter Azure revenue is up 29%, but next quarter's growth could rise 40%Two-thirds of last quarter's capex was dedicated to CPUs, GPUsMicrosoft 365 Copilot now has over 20 million paying customersIn its latest quarterly results, Microsoft…
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