Microsoft’s AI Growth Drives Both Revenue and Massive Capital Expenditure | PYMNTS.com

By migrating enterprises from on-premise software to subscription services and hyperscale infrastructure, the Redmond, Washington-based tech giant in many senses rewired corporate infrastructure from the ground-up, or the cloud-down.

But if Microsoft’s second quarter fiscal 2026 earnings call Wednesday (Jan. 28) is any indication, the company’s latest transformation story now revolves around artificial intelligence (AI).

“We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises We are pushing the frontier across our entire AI stack to drive new value for our customers and partners,” Satya Nadella, chairman and CEO of Microsoft told investors, according to the earnings release.

The clearest signal of Microsoft’s AI strategy appeared in its Intelligent Cloud segment. Revenue there rose 29% year over…