Microsoft reports $49B in cloud revenue despite capacity woes

In the midst of an outage, Microsoft’s CFO reported that its Azure revenue growth was hampered by a capacity shortage that will continue throughout its fiscal 2026.

Dive Brief:

• Set against the backdrop of an Azure outage, Microsoft reported sizable growth in its cloud revenue and adoption of its AI offerings as it kicked off fiscal year 2026 reporting, according to a Wednesday earnings call for the quarter ending Sept. 30. 
• CEO Satya Nadella said there’s about 900 million monthly active AI users across Microsoft’s product portfolio. The company’s Copilot offerings have garnered 150 million monthly active users while its small language model family Phi has been downloaded 60 million times, increasing 3x year-over-year, Nadella said. 
• Cloud revenues were up 26% year over year, surpassing $49 billion. Microsoft’s Azure and other cloud services revenue increased 40% compared with the previous year. The Azure-based AI platform ...