Microsoft Cloud Growth restricted by the scarcity of the data center


(Bloomberg) -Microsoft Corp. He said that his cloud computing business will continue to grow slowly in the present quarter, as the company struggles to build enough data centers to manage the demand for its artificial intelligence products.

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Income to the Azure Cloud division will increase to 32% in the third fiscal quarter, not much faster than in the last three months of 2024. Shares fell 6% up to $ 415.79 at 9:33 AM in New York on Thursday.

The Washington -based Redmond software manufacturer is considered a leader in the marketing of artificial intelligence products, thanks to his close collaboration with Chatgpt Openai’s manufacturer. Last year, Microsoft has triggered a Copilot brand bubble of AI attendees, but efforts to gain income from these products take more than some investors would prefer.

Microsoft said Azure Ai Services grew by 157%. But the general sales of the key clouds unit are affected by the fact that the company does not yet have enough data center capacity to meet the needs of the client, said CFO Amy Hood in an interview. Later he told investors that capacity restrictions should rise at the end of the exercise.

The company has almost $ 300 million of commercial service contracts that Microsoft must provide in the future and has not yet recognized revenue.

Demand is still strong, with trade reserves, a measure of future income, increasing 67%, “very forward” from what Microsoft had expected. Hood partly attributed it to the Azure commitments of Openai.

Together with the clouds of Google and Amazon.com Inc., Microsoft spends more than ever in its history, prominent who are mostly targeted at the chips and data centers needed to feed the AI ​​services hungry. The company has said to spend $ 80 million this fiscal year in AI data centers. Wall Street has begun to question mass expenses, especially after Chinese Deepseeek’s first moment launched a new open source IA model that claims that it rivals American technology with a cost fraction.

Capital spending during the quarter was $ 22.6 billion, said the company, which exceeded $ 21 billion analysts expectations. The creation of infrastructure led to narrower margins in the cloud business.



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