Microsoft AI Revenue Hits $37 B with Rapid Azure Growth

Microsoft reported that its artificial‑intelligence business reached an annual revenue run rate of $37 billion for the quarter ended March 31, 2026, a 123 percent increase year over year. Azure services grew 40 percent in the same period, marking the company’s fastest quarterly growth in seven quarters. The surge was driven by heightened enterprise demand for AI workloads on Azure AI Foundry, which now hosts over 1,900 curated models and more than 10,000 open‑source models.

Capital spending also rose sharply, with $31.9 billion invested in the quarter and guidance for Q4 capex above $40 billion, putting total 2026 spending on track for roughly $190 billion. Microsoft confirmed that AI capacity is first allocated to its own products, including Microsoft 365 Copilot and GitHub Copilot, before being offered to external Azure customers. Microsoft 365 Copilot crossed the 20‑million paid‑enterprise‑seat milestone, up 250 percent year over year.