Microsoft ramps data center spend as Copilot and Azure growth face scrutiny

Microsoft’s latest quarter showed strong top-line momentum, but the market response underscored a different concern: the company is spending at an extraordinary pace to scale AI infrastructure, and investors want clearer proof that usage and margin expansion will follow.

Microsoft’s capex surge is the story behind the stock move

Microsoft posted 81.3 billion dollars in quarterly revenue (up 17 percent) and 38.3 billion dollars in net income (up 21 percent), alongside more than 50 billion dollars in cloud revenue. The debate quickly shifted to buildout costs. According to Microsoft’s published financial statement, the company spent 88.2 billion dollars in capital expenditures last fiscal year and has already spent 72.4 billion dollars in the first half of the current fiscal year, signaling an accelerated data center and hardware expansion cycle.

A meaningful share of that capacity is aimed at serving enterprise AI workloads and major model developers, including OpenAI and Anthropic. The implicit bet: once the infrastructure is deployed, it will be utilized at high rates long enough to generate attractive ROI.

Copilot usage signals are mixed, while paid seats show early enterprise traction

On the earnings call, CEO Satya Nadella emphasized that demand is exceeding supply and suggested new capacity is effectively pre-booked for much of its usable life. However, the company offered limited clarity on consumer Copilot scale, saying daily users of its consumer Copilot experiences are “nearly 3x” year over year, without disclosing a concrete user count.

Microsoft’s annual report previously stated it surpassed 100 million monthly active Copilot users; a spokesperson now pegs that figure at 150 million total across commercial and consumer. For marketers and product leaders, the more actionable indicators sit in paid adoption: GitHub Copilot has 4.7 million paid subscribers (up 75 percent), and Microsoft 365 Copilot has 15 million paid seats out of a 450 million paid-seat base.

For B2B teams evaluating workflow automation, the key near-term signal is whether these paid seat counts keep compounding fast enough to justify Microsoft’s front-loaded infrastructure spend.