Microsoft’s CFO Emphasizes Record Spending and OpenAI Partnership in Post-Earnings Note
Microsoft Chief Financial Officer Amy Hood underscored the company’s unprecedented investment in AI and cloud infrastructure — nearly $34.9 billion in the most recent quarter — in an internal memo sent to employees following the company’s earnings announcement on Wednesday.
The tech giant posted revenue of $77.7 billion for the first quarter of its fiscal year ending in September, topping analyst expectations. Despite the strong results, Microsoft’s stock dipped more than 3% in after-hours trading as investors questioned whether surging demand for AI computing resources could outpace Microsoft’s ability to supply them.
The earnings update arrived shortly after Azure experienced a service outage, adding to broader concerns about whether the industry’s massive capital outlays in AI infrastructure will ultimately prove sustainable.
Hood regularly sends staff a breakdown of each quarter’s financial performance. While these memos often mirror Microsoft’s public statements, they also signal the internal priorities leadership considers most significant. This quarter, Hood highlighted the company’s record spending on GPUs, CPUs, and datacenter systems to rapidly expand cloud capacity and keep pace with accelerating AI workloads.
“Demand continues to accelerate, and we’re investing to capture the opportunity ahead,” Hood wrote, stressing that teams across Microsoft are scaling infrastructure and rolling out new AI-driven offerings at unprecedented speed.
The memo also referenced Microsoft’s newly finalized agreement with OpenAI. Under the terms, Microsoft will take a 27% stake in OpenAI’s for-profit arm, valued at roughly $135 billion. The company also agreed to give up first-refusal rights on providing new computing resources. Hood described the deal as a major milestone in their long-running partnership, though she noted it had no impact on first-quarter financial results because it was signed after the reporting period ended.
Hood’s email went on to highlight major performance drivers across the business: Microsoft Cloud revenue climbed to $49.1 billion, rising 26%; commercial RPO surged more than 50%, hitting $392 billion; Azure revenue growth outpaced expectations at 39% in constant currency; Microsoft 365 and consumer cloud subscriptions continued to expand, surpassing 90 million subscribers; Bing and Edge again grew market share; and Windows, Xbox, and LinkedIn all posted year-over-year gains.
Hood encouraged employees to listen to the earnings call for a broader view of the company’s upcoming quarter and reminded them to tune into Microsoft Ignite in November, where leadership will unveil new AI and cloud innovations.
She closed by thanking staff for a strong start to the fiscal year, emphasizing that the company is moving quickly to seize emerging AI opportunities. “It’s a defining moment for every organization,” Hood wrote, “and we’re just getting started.”
