Microsoft plans to invest more than $30 billion in capital expenditures in the upcoming quarter — a new high — as it races to expand its cloud and AI infrastructure.
Amy Hood, the company’s chief financial officer, disclosed the figure on Microsoft’s earnings call after the company reported stronger-than-expected results for its fiscal fourth quarter, including $76.4 billion in revenue, up 18% from a year earlier, and earnings of $3.65 per share, a 24% increase.
The company reported $24.2 billion in capital spending for the recently completed quarter. More than half of that was directed toward long-lived assets expected to support monetization for 15 years or more, Hood said, while the remainder focused on servers — both CPUs and GPUs — to support growing AI workloads.
Hood said the company is making the investments based on “continued strong demand signals” for AI from Microsoft’s customers.
Keeping up with Amazon and Google
Microsoft continues provide significant computing capacity to OpenAI for training and running the models that power OpenAI and other applications. The Redmond company is racing against cloud rivals Amazon and Google in building capacity to train and run AI models for a wide range of consumer and business applications.
- Google’s capital spending for the second quarter of 2025 was $22.4 billion, according to numbers released as part of its earnings report last week.
- Amazon could see as much as $111 billion in capital expenditures this year, with the majority going toward technology and infrastructure, according to Morgan Stanley estimates.
AI boosts cloud demand
In a new disclosure, Microsoft said revenue from its Azure cloud platform surpassed $75 billion for the fiscal year, up 34% from the prior year — driven not only by AI demand but by “growth across all workloads,” according to a statement from Microsoft CEO Satya Nadella in the company’s earnings release.
Later, speaking on Microsoft’s earnings call, Nadella said the company’s Copilot applications have surpassed 100 million monthly active users across commercial and consumer offerings.
By comparison, Google last week said its Gemini app now has more than 450 million monthly active users, which reflects the search giant’s larger reach on Chrome and Android devices.
Overall, Microsoft now has more than 800 million monthly active users of AI-powered features across its products, Nadella said on the call.
Capital spending and job cuts
The record-setting capital investments coincide with significant workforce reductions at the company, totaling more than 15,000 cuts since May. In a recent press conference and interview with GeekWire, Microsoft President Brad Smith said that internal AI-driven efficiency gains were “not a predominant factor” in the company’s layoffs.
However, he noted that rising capital expenditures have created pressure to reduce operating costs, which consist largely of employee headcount.
In a memo to employees last week, Nadella acknowledged the “uncertainty and seeming incongruence” of thriving financially while undergoing major layoffs.
“This is the enigma of success in an industry that has no franchise value,” he wrote. “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding. But it’s also a new opportunity for us to shape, lead through, and have greater impact than ever before.”
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