Microsoft invests $ 80 billion in AI, but the growth of its cloud business has slowed down

The growth of Microsoft Azure cloud business has slowed down due to the lack of data centers necessary to support the demand for products related to artificial intelligence (AI). In the third quarter of the 2025 financial year, Azure revenue growth can be up to 32 %, which only slightly exceeds the indicators of the last months of 2024. Against the background of these news, the company’s shares fell by 5 % during additional tenders.

Despite the fact that Microsoft is considered a leader in the commercialization of AI-based products thanks to the close partnership with Openai, and over the past year has released a lot of ASSISTRIA under the Copilot brand, the monetization of these products is more slowly than investors expected, Bloomberg reports.

Nevertheless, the demand for Azure AI services remains high, their growth was 157 % over the last quarter. However, as the financial director of Microsoft Amy Hood said, the lack of data centers restrains the overall development of the cloud unit. “We are faced with restrictions on the capacity of the data centers, which are expected to be removed by the end of the financial year,” said Hood, also noting that the company has commercial contracts for the amount of almost $ 300 billion, which have not yet been taken into account in revenue. She expressed confidence that the problem will be resolved by the end of the financial year.

Microsoft, along with competitors of Google and Amazon, invests record amounts in the construction of data centers and the development of energy-intensive and solutions. In the current financial year, the company plans to spend $ 80 billion on the development of infrastructure for AI. However, these costs raise questions from investors, especially after the Chinese startup Deepseek presented an open AI model, which, as it has recently became known, is comparable in capabilities with American analogues, but cost developers many times cheaper.

As Bloomberg notes, in the second quarter of the current financial year, Microsoft’s income increased by 12 %, reaching $ 69.6 billion and slightly exceeding the forecasts of analysts of $ 68.9 billion. Profit amounted to $ 3.23 per share, which also exceeded expectations ($ 3.12 on action). It is reported that 13 percentage points of Azure growth are associated with products based on artificial intelligence and above the indicator of the first quarter, which amounted to 12 points. In general, according to the results of the quarter, Microsoft revenue for AI products reached such a pace that will expect an annual income of $ 13 billion from this area of ​​activity.