Microsoft adjusts capital expenditure outlook amid AI infrastructure delays

Microsoft has revised its 2026 capital expenditure forecast to $170 billion from $175 billion, citing delays in new AI capacity, particularly from third-party GPU-as-a-service contracts, expected in the second half of the fiscal year. CFO Amy Hood attributed delays to electricity shortages and local opposition to data center projects. Despite the cut, Microsoft anticipates higher capex in the second half as delayed capacity comes online. The company reported $92.3 billion in revenue for the fiscal first-quarter ending Sept. 30, with Azure cloud revenue up 48% to over $33 billion. Microsoft shares rose about 3% in after-hours trading. The company also announced a buyout offer to over a quarter of its workforce, with only 5% of eligible employees expected to accept it. Headcount dropped 2% during the quarter. Hood emphasized confidence in future growth, stating, 'We expect very few people to select this offer because of the growth opportunities here at Microsoft.' The CFO’s comments come amid Wall Street concerns about massive AI infrastructure investments, with Microsoft’s capex reduction standing out in an industry where most companies are increasing AI spending.