Microsoft increases spending on new projects amid AI race

Microsoft's big spending on artificial intelligence shows no signs of letting up.

- NATALLIE ROCHA

On Wednesday, the company reported spending a larger-than-expected $34.9 billion on new projects in the three months through Sept 30 as it races to build data centres that provide computing power to fuel the Al boom, a 74% increase from a year earlier.

Microsoft reported sales of $77.7 billion, up 18% from the same period last year. The company reported $27.7 billion in profits, up 12%.

Driving much of the company’s growth was its flagship cloud computing product, Azure, as well as a partnership with the AI startup OpenAl.

“We will increase our total AI capacity by over 80% this year and roughly double our total data centre footprint over the next two years, reflecting the demand signals we see,’ Satya Nadella, Microsoft's chief executive, said on an investor call.

The earnings report was largely inline with Wall Street’s expectations, beating them slightly on revenue and profit. Microsoft's shares sank more than 3% in after-hours trading.