Microsoft said on Wednesday that it continued to spend heavily on data centers for artificial intelligence with $37.5 billion in capital expenditures in its most recent quarter, up about 65 percent from the same period a year ago.
The company reported that revenue in the quarter was $81.3 billion, up 17 percent from the same period last year. Microsoft’s profits were $38.5 billion, up 60 percent from last year. Both numbers beat Wall Street’s expectations.
Microsoft’s Azure business, a closely watched segment that is indicative of the traction of its A.I. business, was up 39 percent. That also slightly beat Wall Street expectations.
“We are only at the beginning phases of A.I. diffusion and already Microsoft has built an A.I. business that is larger than some of our biggest franchises,” Satya Nadella, Microsoft’s chief executive, said in a statement.
Shares of Microsoft were down more than 5 percent in after-hours trading on Wednesday.
For the past few years, Microsoft’s A.I. business has been closely tied to OpenAI, the San Francisco company behind ChatGPT.
In October, OpenAI laid out its plans to transition to a for-profit corporate structure, which required changes in its existing relationship with its largest investor, Microsoft. Under the new arrangement, Microsoft is expected get a roughly $135 billion stake in OpenAI and unfettered access to its technology, and OpenAI committed to buying $250 billion in computing power from Microsoft.
Microsoft continues to spend billions on building out its data center capacity as the demand for A.I. computing power outweighs its available supply. Microsoft said these capacity constraints would persist through 2026.
Mr. Nadella said during last quarter’s earnings call that Microsoft planned to increase its total A.I. capacity by more than 80 percent over the next two years.
(The New York Times has sued OpenAI and Microsoft, claiming copyright infringement of news content related to A.I. systems. The two companies have denied the suit’s claims.)
Natallie Rocha is a San Francisco-based technology reporter and a member of the 2025-26 Times Fellowship class, a program for early-career journalists.
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