Microsoft Appeals Virginia Data Center Rules as Azure Sales Top $100 Billion

Microsoft is navigating growing scrutiny over its data-center expansion's energy costs while preparing to give investors greater visibility into Azure, its key cloud and artificial intelligence growth business.

The company has appealed to the Virginia Supreme Court after state regulators ordered data centers to pay upfront for transmission infrastructure built specifically for them. Microsoft argued that Virginia's rules could conflict with federal efforts to standardize how data centers pay for grid upgrades.

Separately, Microsoft will begin reporting quarterly Azure revenue after years of calls from Wall Street for greater disclosure. The company disclosed Azure revenue of $29.4 billion for the most recent quarter and said annual Azure sales surpassed $100 billion, up from $75 billion a year earlier.

MICROSOFT RESHAPE REPORTING AROUND AI

Microsoft will also combine Intelligent Cloud and Productivity and Business Processes into a new Agents and Infra segment, while More Personal Computing becomes Devices and Consumer. CEO Satya Nadella's note said artificial intelligence is 'changing what we build and how we operate' while reshaping Microsoft's business models.