Key points
- What the report said about Azure
- How Microsoft responded
- How much Microsoft is spending on infrastructure
Microsoft (MSFT) denied a report that the head of its core Azure cloud business told leaders to find cost cuts of at least 20%. A spokesperson called the report "inaccurate and careless," Fast Company reported on October 14.
"Azure leadership has not directed teams to develop cost-cutting plans," the spokesperson said. "Every responsible company prepares for a range of scenarios and market dynamics, both positive and negative."
The report tied the cuts to AI spending
The Information reported on October 13 that Girish Bablani, president of Azure Core, had directed leaders in the division to develop plans to cut costs by at least 20%. The cuts could help offset Microsoft's heavy spending on AI data centers and free up money to compete for top AI talent, according to the report. One option could be letting go of outside contractors.
Separately, Microsoft cloud and AI chief Scott Guthrie told staff about a reorganization of Azure's leadership that gives database head Arun Ulag a bigger role, The Next Web reported.
Microsoft's AI build-out keeps growing
Microsoft spent $116 billion on property and equipment in its fiscal year that ended June 30, up from $64.6 billion a year earlier, according to its annual report. That figure counts cash spending and excludes assets acquired through finance leases.
Microsoft also plans to run its AI products mainly on its own Maia chips starting in 2027.
Microsoft shares were down 1.7% at $534.23 as of 2:24 p.m. ET.
