AI Expenses Trim Microsoft’s Quarterly Earnings by $3.1 Billion

Microsoft’s latest quarterly report showed earnings impacted by higher infrastructure and partnership costs related to AI expansion. The company noted a $3.1 billion reduction in operating profit tied to investments in cloud capacity and integration with OpenAI products. Despite lower margins, revenue climbed on strong demand for Azure and productivity tools. CFO Amy Hood said near-term costs reflect strategic positioning in enterprise AI. Analysts expect profitability to improve once utilization rates normalize and newer AI-driven offerings begin contributing incremental revenue streams.