Microsoft AI investments raise questions about long-term strategy

CEO Satya Nadella reported rising interest in cloud and AI sovereignty, which analysts warned could lead to more selective enterprise buying patterns.

Dive Brief: 

• Microsoft’s capital expenditures reached $37.5 billion for the period ending Dec. 31, 2025, with roughly two-thirds going to GPUs and CPUs as “customer demand continues to exceed our supply,” Microsoft EVP and CFO Amy Hood said during the company’s Q2 2026 earnings call on Wednesday. Remaining spend was allocated to assets including large data center sites. 
• When it comes to cloud, “the key to long-term competitiveness is shaping our infrastructure to support new high-scale workloads,” Microsoft CEO Satya Nadella said during the call. “We added nearly 1 gigawatt of total capacity this quarter alone.” 
• Microsoft’s cloud revenues rose 26% to $51.5 billion year-over-year, the company reported. Revenue for Microsoft Azure and other cloud services increased 39%, compared with 31% in the ...