This article first appeared on GuruFocus.
Microsoft Corporation (MSFT, Financials) said it continues to view OpenAI as a major and reliable Azure customer, despite reports that the ChatGPT maker may trim long-term spending forecasts.
In a meeting with BNP Paribas, Microsoft’s investor relations team emphasized that components of its roughly $250 billion agreement with OpenAI are being delivered on schedule, with commitments extending into late 2025 and early 2026. The company said it remains supply constrained, suggesting incremental OpenAI demand would not immediately boost Azure revenue.
Addressing competitive concerns around Anthropic, Microsoft said enterprise AI adoption requires backend infrastructure, governance and security tools, areas where it believes its Microsoft 365 ecosystem provides an advantage. The company cited more than 450 million Microsoft 365 users and 15 million Copilot users.
Microsoft also indicated that AI-related capital expenditures, which have accelerated alongside spending by Alphabet Inc., Amazon.com, Inc. and Meta Platforms, Inc., should eventually moderate.
Management added that Azure AI margins are already above early-stage cloud margins, easing concerns about long-term profitability dilution. Microsoft is expected to provide additional commentary on fiscal 2027 capital spending when it reports earnings in April.
