Microsoft lifts 2026 AI spend by $25 billion to cover component price rises

If you've felt the sting of surging hardware prices, Microsoft can sympathize because the company on Wednesday said it expects its 2026 capital expenditure will hit $190 billion, with $25 billion of that due to rising component costs.

Memory and storage prices have skyrocketed since last northern autumn, in some cases more than tripling in price, with demand for AI infrastructure squarely to blame.

Despite higher costs, Redmond appears undeterred in its quest to win the AI arms race. Last quarter, Microsoft spent roughly $32 billion to bring additional compute capacity online, which means the company is on track to spend another $158 billion between now and Christmas.

According to CFO Amy Hood, next quarter alone the company plans to spend about $40 billion on hardware and datacenters to house it.

Hood said that despite spending megabucks “we expect to remain constrained at least through 2026.”

The company's ...