Microsoft Puts Brakes on AI Spending as Profit Increases 18% 7
After 10 consecutive quarters of rising AI-related investment, Microsoft has put on the brakes, spending over $1 billion less than the previous quarter (source paywalled; alternative source). Despite the slight slowdown, Microsoft posted stronger-than-expected results with $70 billion in revenue and $25.8 billion in profit. The New York Times reports: 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 is still on track to spend more than $80 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 surpassed Wall Street's expectations. "Cloud and A.I. are the essential inputs for every business to expand output, reduce costs, and accelerate growth," Satya Nadella, Microsoft's chief executive, said in a statement.
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 surpassed Wall Street's expectations. "Cloud and A.I. are the essential inputs for every business to expand output, reduce costs, and accelerate growth," Satya Nadella, Microsoft's chief executive, said in a statement.
Up like 8% (Score:3)
Stock is up like 8% for the day. It's about damned time. OpenAI has been an albatross around MSFT's neck since Sam Altman got re-hired.
hit the brakes on AI hype (Score:1)
Geez, I think I'll read it.
Ok, folks, that's barely an article. The summary makes the only point: cloud and AI has driven profit growth. There are no other details. The market wants the hype to stop. and liked more conservative AI investments.
So where does the significant growth come from?
Is that from US Military spending?
Re: (Score:2)
Re: (Score:2)
Interesting comments.. but I'm still wondering where STRONG profit growth comes from... people are buying what they are selling apparently. If you live here, you would wonder who in their right mind is running towards Microsoft right now, I'm guessing it's not small fry, but likely the biggest companies and likely governments. I suspect that the AI landscape will look quite different in 3 years. For
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My bet is that the growth comes from the 50 million or so (warning: number hallucinated) small/medium/large businesses that want to experiment with AI. They run a few experiments on Azure (and presumably Amazon). Then they add a chatbot to their website (or have a "new and improved" one) and make the user experience of their site even worse.
All of this is money in Microsoft's pocket. Microsoft is selling the tools for the gold rush (as well as participating themselves, but the tools are probably where the r
AI is a money pit (Score:1)
Brakes on spending does not mean brakes on AI (Score:2)
Such articles make things sound like they are losing trust in AI. But one huge point is, that AI got cheaper by orders of magnitude in the last years. You don't need to spend as huge amounts of money on it as before.
People speedrun training of GPT-2 nowadays just for fun and it costs them only $20 in cloud ressources (2024, today possibly even less).