Microsoft cuts capex forecast on AI capacity delays (www.businessinsider.com)

Microsoft has revised its capital expenditure forecast down to $170 billion for the 2026 calendar year, citing delays in acquiring new AI capacity mainly due to postponed "GPU-as-a-Service contracts" with third-party providers. This adjustment comes as a surprise in an industry where fierce competition has driven ongoing investments in AI infrastructure. CFO Amy Hood indicated that delays are attributed to various factors, including limitations in electricity availability and local opposition to new data center projects, suggesting that external influences are impacting AI capacity growth. This reduction in forecast could signal potential ramifications for the AI/ML community, as it reflects broader supply chain challenges and infrastructure hurdles that might hinder the rapid scaling of AI services. However, Hood reassured investors that acceleration in capex is anticipated in the latter half of the fiscal year as delayed capacity begins to materialize. In the meantime, Microsoft's financial performance remains strong, with a 19% revenue increase to $92.3 billion and Azure cloud revenue soaring by 48% to over $33 billion, indicating resilience amid the fluctuating investment landscape.