Business · Companies · 4 hrs ago
Microsoft cuts 2026 capital spending forecast as AI capacity is delayed
Microsoft lowered its 2026 capital spending forecast to $170 billion, down from $175 billion.
The company said some capacity it expected from outside providers has been delayed, including contracts for access to GPUs used to run AI services.
The delayed capacity is expected to arrive in the second half of Microsoft's fiscal year, when the company expects its spending to accelerate.
The delays come as technology companies invest heavily in data centers and other infrastructure to meet demand for AI services.
Microsoft's Azure cloud revenue rose 48% in the fiscal first quarter, while overall revenue reached $92.3 billion, up 19%.
The forecast cut comes amid investor concern about the scale of AI investments, though Microsoft did not say it was abandoning its expansion plans.
Microsoft cut its 2026 capital expenditure forecast to $170 billion from $175 billion.
Chief Financial Officer Amy Hood said delays to third-party AI capacity were behind the change.
Some GPU-as-a-Service contracts are delayed until the second half of Microsoft’s fiscal year.
Microsoft expects capital spending to accelerate in that half as the delayed capacity arrives.
The company reported $92.3 billion in revenue for its fiscal first quarter, up 19% year over year.
- Who
- Microsoft, with the forecast given by Chief Financial Officer Amy Hood.
- What
- Microsoft reduced its 2026 capital expenditure forecast to $170 billion from $175 billion.
- When
- Hood gave the forecast on Wednesday’s fiscal first-quarter earnings call.
- Where
- Not stated.
- Why
- Some third-party GPU-as-a-Service contracts expected to provide new capacity have been delayed.
This story does not have two clearly opposing sides.
Microsoft kept its capital expenditure forecast unchanged.
Amy Hood gave a lower 2026 capital expenditure forecast on Microsoft’s fiscal first-quarter earnings call.
Microsoft expects delayed third-party capacity to arrive and capital spending to accelerate.
- 2026 capital expenditure forecast
- $170 billion, down from $175 billion
- Delayed contracts
- Some GPU-as-a-Service contracts
- Expected arrival of delayed capacity
- Second half of Microsoft’s fiscal year
- Fiscal first-quarter revenue
- $92.3 billion, up 19%
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