Microsoft Earnings Report: AI Spending Slows as Profit Increases 18%
The tech giant’s revenue also grew 13%, topping Wall Street’s expectations.
The tech giant’s revenue also grew 13%, topping Wall Street’s expectations.
Since the release of the ChatGPT chatbot in 2022, Microsoft has plowed more and more money into building data centers in what one industry analyst called “the largest infrastructure build-out that humanity has ever seen.”
But after 10 consecutive quarters of increased spending for artificial intelligence, the company has tapped on the brakes, according to financial results released Wednesday.
In the first three months of 2025, Microsoft spent $21.4 billion on capital expenses, down more than $1 billion from the previous quarter.
The company indicated it was on pace to spend more than than $85 billion on capital expenses in the current fiscal year, which ends in June. But the pullback, though slight, is an indication that the tech industry’s appetite for spending on A.I. is not limitless.
Overall, Microsoft’s results showed unexpected strength in its business. Sales surpassed $70 billion, up 13 percent from the same period a year earlier. Profit rose to $25.8 billion, up 18 percent. The results far exceeded Wall Street’s expectations.
Despite the economic uncertainty, the company predicted more strength ahead, saying revenue would surpass $73 billion in the current quarter.
