Microsoft Trims 2026 Capex to $170 Billion as Some GPU Contracts Slip

October 29 — Even as the tech industry keeps pouring money into AI, Microsoft has unusually cut its capital spending forecast. According to a report this morning (29th) by Business Insider, CFO Amy Hood said on the earnings call that the company now expects 2026 capex of $170 billion (about 1.14 trillion yuan), down $5 billion (about 33.4 billion yuan) from the previous $175 billion forecast.

Microsoft had expected to receive additional computing capacity from third-party suppliers, but some GPU compute service contracts have slipped to the second half of fiscal 2027, which corresponds to the first half of calendar 2027.

Those contracts may involve other suppliers that provide AI cloud services using Nvidia GPUs. As the delayed capacity is delivered, Microsoft expects capex to accelerate in the second half of the fiscal year.

Cloud providers’ heavy spending on AI infrastructure is making Wall Street increasingly nervous. Microsoft did not raise its capex forecast last quarter, in contrast with other cloud giants that keep increasing their AI budgets.

The results show that in its first fiscal quarter of 2027, ended 30 September, revenue rose 19% year on year to $92.3 billion (about 616.6 billion yuan). Azure cloud revenue grew 48% to more than $33 billion (about 220.5 billion yuan), beating Wall Street expectations.

After the earnings call, Microsoft shares rose about 3% in after-hours trading.

At the same time, the company’s headcount fell 2% during the quarter. Earlier this week Microsoft offered voluntary buyouts to more than a quarter of its employees. A spokesperson said the company expects no more than 5% of eligible staff to accept: “Microsoft offers a lot of opportunities, so we expect only a very small number of employees to take this programme.”