"While Microsoft didn't offer a specific forecast for its AI capital expenditures for the next quarter or coming year, the company's chief financial officer, Amy Hood, said that the company's total spend will "increase sequentially, and we now expect the fiscal year 2026 growth rate to be higher than fiscal year 2025." Tech companies are making these ambitious plans for more capital spending under the assumption that demand for AI will only continue to grow."
"Those worries are being fueled by announcements about enormously expensive, multi-year data center projects and staggered investments. Last month, Nvidia said it would invest "up to $100 billion" in OpenAI, provided that the ChatGPT maker builds and deploys at least 10 gigawatts of AI data centers using Nvidia's chips. OpenAI, meanwhile, said just yesterday that it was planning to develop 30 gigawatts of computing resources worth $1.4 trillion."
"Microsoft has committed to putting a total of $13 billion in OpenAI, and it continues to use the company's frontier AI models, but took a $3.1 billion hit in net income this quarter due to losses from that investment. Microsoft said that the ongoing nature of its partnership with OpenAI will result in increased volatility. Going forward, Hood said, the company will exclude any impacts from its OpenAI investment in its financial outlooks."
Microsoft plans to increase AI-related capital expenditures sequentially and expects fiscal 2026 capex growth to be higher than fiscal 2025. The company will exclude OpenAI investment impacts from future financial outlooks after a $3.1 billion net-income hit tied to that investment and cited ongoing partnership-driven volatility. Tech firms are pursuing large, multi-year data center projects and staggered investments on the assumption of persistent AI demand. Nvidia and OpenAI announced contingency and expansion plans worth hundreds of billions, while Microsoft is committed to $13 billion in OpenAI and is modernizing data centers to be fungible.
Read at WIRED
Unable to calculate read time
Collection
[
|
...
]