Microsoft Puts Brakes on AI Spending as Profit Increases 18%

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.

Read more of this story at Slashdot.