Microsoft Cloud Growth Fueled by 43% Azure Revenue Spike Amid Regulatory Scrutiny

Microsoft (MSFT) is experiencing strong cloud and AI momentum, driven by Azure's 43% year-over-year growth in revenue. The company's cloud business reached $59.3 billion, with elevated spending on AI-related infrastructure. This growth has come despite scrutiny over chip supplies, job cuts, and regulatory moves from China, the Netherlands, and Australia.

The tech giant is also investing heavily in its global infrastructure expansion, including a new Fairwater AI data center in Wisconsin that went live ahead of schedule. However, Microsoft faced criticism after a Guardian probe questioned whether it has enough AI chips for fast AI expansion. The company disputed the probe's figures and stated that it doesn't disclose chip counts.

In addition to its cloud growth, Microsoft is also expanding its data center presence in Amsterdam, where it won approval in January 2026 to build a three-tower facility. However, this move has raised concerns about the impact on local hyperscale thresholds and data center limits. Furthermore, the company cut around 4,800 jobs in a restructuring tied to AI adoption, cost pressures, and shifting business needs.