Microsoft CFO Amy Hood says a supply crunch sits at the center of the firm’s AI ambitions, and it’s not easing anytime soon.
Speaking on Microsoft’s latest earnings call, Hood says the company continues to chase capacity as rapidly increasing demand for AI services accelerates the need for data centers, GPUs and next-generation infrastructure.
Hood says Microsoft is pouring long-life capital into data centers designed to operate for decades, yet demand is rising so fast that the company remains behind the curve.
“We have been short now for many quarters. I thought we were going to catch up. We are not. Demand is increasing. It is not increasing in just one place.”
Hood says the surge is happening across enterprise workloads, product launches and infrastructure pipelines, pushing Microsoft to expand power, land and accelerated compute faster than originally planned.
“We’re seeing usage increases in products. We’re seeing new products launch that are getting increasing usage and increasing usage very quickly. When people see real value, they actually commit real usage.”
For now, Hood says Microsoft’s priority is to address Azure’s capacity constraints as the firm expects to witness lost revenue potential for its cloud computing platform.
“We now expect to be capacity-constrained through at least the end of our fiscal year, with demand exceeding current infrastructure buildout, resulting in lost revenue opportunities for Azure in fiscal Q1 2026.”
Microsoft is not the only firm seeing massive AI demand that outpaces expectations. In September, Alibaba chief executive Eddie Wu said demand for AI infrastructure has “far exceeded our expectations.”
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