Microsoft CEO Satya Nadella mentioned the corporate is evaluating components comparable to demand, workload patterns, and site earlier than committing to knowledge centre initiatives. He made the remarks through the firm’s earnings name, addressing reviews based mostly on a memo by TD Cowen analysts that Microsoft has deserted knowledge centre initiatives within the US and Europe that may have used 2 gigawatts of electrical energy, resulting from an oversupply relative to its near-term demand forecast.
“The important thing factor for us is to have our builds and leases be positioned for what’s the workload development of the longer term,” Nadella mentioned. He pointed to the evolving nature of AI workloads, distinguishing between conventional coaching and rising patterns like pre-training mixed with test-time compute. “There’s Moore’s Legislation, there’s system software program, there’s mannequin structure adjustments, there’s the app server effectivity.”
Nadella additionally cautioned in opposition to concentrating an excessive amount of infrastructure in anyone location. “You don’t need to be upside-down on having one massive knowledge heart in a single area, when you may have a worldwide demand footprint,” he mentioned.
Equally, Microsoft CFO Amy Hood mentioned that these are long-term selections. “Only a reminder, these are selections with lengthy lead occasions, from land acquisition to build-out, it could actually take 5 to seven years, or two to 3 years,” Hood mentioned. “So we’re always in a balancing act as we monitor demand curves.”
Regardless of scaling again some leasing exercise, Microsoft continues to speculate aggressively in its infrastructure. “We proceed to increase our datacenter capability. This quarter alone, we opened DCs in 10 nations throughout 4 continents,” Nadella mentioned.
Microsoft additionally plans to increase its knowledge centre capability in Europe by 40 per cent over the following two years.
Microsoft has dedicated $80 billion in fiscal 12 months 2025 (ending June 2025) on AI-enabled knowledge centres to help AI mannequin coaching, deployment, and cloud companies.
The replace got here alongside Microsoft’s earnings for the quarter ended March 31, 2025, during which it reported $70.1 billion in income, up 13% year-over-year (15% in fixed foreign money). Internet revenue rose 18% to $25.8 billion, with working revenue up 16% to $32.0 billion.
Income from the Clever Cloud phase was $26.8 billion, a 21% improve. This included a 22% rise in server merchandise and cloud companies income, led by a 33% development in Azure and different cloud companies.
“In Azure, we count on This fall income development to be between 34% and 35% in fixed foreign money pushed by sturdy demand for our portfolio of companies,” mentioned Hood. “In our AI companies, whereas we proceed to convey datacenter capability on-line as deliberate, demand is rising a bit sooner. Due to this fact, we now count on to have some AI capability constraints past June.”
The corporate attributed its sturdy efficiency to development in cloud and AI choices. “Cloud and AI are the important inputs for each enterprise to increase output, cut back prices, and speed up development,” Nadella mentioned. “From AI infra and platforms to apps, we’re innovating throughout the stack to ship for our clients.”
Microsoft Cloud income reached $42.4 billion, up 20%. Nadella additionally shared that greater than 15 million folks are actually utilizing GitHub Copilot, 4 occasions as many as final 12 months.
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