Microsoft · Datacenter Dynamics
Microsoft brings 1GW of capacity online in latest quarter, again
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Microsoft is continuing its trend of standing up 1GW of capacity every three months, having managed the task for the second consecutive quarter.
Key facts
- However, Microsoft has said that it is expecting Q4 to have a capex of $40bn, and full year spend to reach $190bn, in part due to a "$25bn higher component pricing
- The company has made a slew of investment commitments over the last few months, including several in the last month alone, such as $10bn to expand infrastructure in Japan, $18bn in Australia, $5.5bn
- While constraints remain, Microsoft's cloud revenue for Q3 was $54.5bn, up 29 percent Year-on-Year (YoY), and up from the previous quarter's $51.5bn, which itself was the first time the cloud
- This followed CFO Amy Hood's decision to put a curb on spending when, at the end of 2024, it started to exceed the $80bn budget
Summary
CEO Satya Nadella revealed that the company's capacity expansion plans remain "on track to double our overall footprint in two years" during the company's Q3 FY2026 earnings call held on April 29. Capex for the quarter, meanwhile, was $31.9 billion, two-thirds of which went on short-lived assets like GPUs and CPUs, and the remainder towards data centers. Furthermore, $4.7bn was spent on data center leases, similarly down from the previous quarter's $6.7bn. This comes after reports that the company was ramping up its efforts to grab capacity, having previously stepped back on some projects.