Microsoft has announced plans to pour more than US$30 billion into capital expenditures in the upcoming quarter, marking its largest investment of this kind to date. The move signals a major financial commitment as the technology giant accelerates its efforts in artificial intelligence (AI) and cloud infrastructure.
The planned expenditure represents a 24% increase compared to the previous quarter, during which the company spent US$24.2 billion on capital projects. A significant portion of the funds will support the purchase of central processing units (CPUs) and graphics processing units (GPUs), which are essential to expanding AI capacity. The remainder will be allocated towards long-term assets with monetization potential of more than 15 years, further underscoring Microsoft’s long-term vision for growth.
Focused on AI and cloud infrastructure
Microsoft’s increased spending comes as the company intensifies its competition with other cloud computing leaders, including Amazon Web Services and Google Cloud. The substantial investment is aimed at building out the infrastructure needed to support AI-powered tools and services, which are increasingly being adopted across industries.
“Cloud and AI are the driving force of business transformation across every industry and sector,” said Microsoft Chief Executive Satya Nadella, highlighting the central role these technologies play in the company’s strategic direction.
The allocation of billions of dollars to AI-specific resources highlights the growing demand for infrastructure capable of supporting intensive workloads. With AI adoption on the rise globally, Microsoft is positioning itself to lead the next wave of technological evolution by scaling its capacity and offering enterprise-grade solutions to its customers.
Strong financial results bolster confidence
In the fourth quarter of its 2025 fiscal year, Microsoft reported revenue of US$76.4 billion, an 18% increase from the same period the previous year. This growth was largely driven by cloud services, which remained among the company’s most profitable segments.
Revenue from Microsoft 365 Commercial rose by 18%, while Microsoft 365 Consumer climbed 20%. Intelligent Cloud revenue increased by 26% to reach US$29.9 billion, and Azure, along with other cloud services, surged by an impressive 39%.
Despite the strong showing in the cloud sector, the company’s performance in the hardware sector was more modest. Windows OEM and Devices revenue saw only a 3% rise, suggesting that traditional PC sales remain relatively flat even as AI and cloud computing drive new revenue streams.
Margins remain strong despite rising costs
Chief Financial Officer Amy Hood acknowledged that the gross margin for Microsoft Cloud had declined by two percentage points to 68%. However, she noted that results were stronger than expected, citing “continued efficiency gains” as a factor in mitigating the impact of increased spending.
The surge in capital investment reflects a broader trend among tech companies, which are investing heavily in next-generation infrastructure to meet the rising demand for AI capabilities. For Microsoft, the move appears calculated to maintain its edge in a fiercely competitive cloud and AI market.
With spending reaching historic levels and cloud revenue continuing to rise, Microsoft is investing heavily in a future driven by AI and cloud computing.
