Following the launch of the ChatGPT chatbot in 2022, Microsoft invested heavily in expanding its data center infrastructure, an effort described by industry experts as one of the largest infrastructure projects in human history.
However, after ten straight quarters of rising AI-related expenditures, the company has recently slowed its spending, according to its latest financial disclosures.
In the first quarter of 2025, Microsoft’s capital expenditures totaled $21.4 billion, marking a decrease of over $1 billion compared to the previous quarter.
Despite this moderation, the company remains on pace to exceed $80 billion in capital spending for the current fiscal year ending in June. This slight reduction signals that the technology sector’s enthusiasm for AI investment may be reaching a more cautious phase.
Microsoft’s overall financial performance demonstrated notable strength, with revenues surpassing $70 billion — a 13 percent increase year-over-year — and profits climbing to $25.8 billion, an 18 percent rise. These figures outperformed market expectations significantly.
Microsoft CEO Satya Nadella emphasized the growing importance of cloud and AI technologies, stating, “Cloud and AI are foundational components for businesses aiming to boost productivity, lower costs, and accelerate growth.”
