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Keithen Drury, The Motley Fool
Sun, April 12, 2026 astatine 3:58 PM CDT 3 min read
Investors are increasing progressively disquieted astir whether the monolithic amounts of wealth being spent connected artificial quality (AI) infrastructure volition ever wage off. This is simply a just question.
Tech giants' absorption teams volition archer investors that AI is simply a must-invest space, and asseverate that the hazard of underspending and being near down is acold greater than the hazard of overspending. Still, information halfway companies are pouring hundreds of billions of dollars into their buildouts, and investors aren't going to tolerate these sorts of superior expenditures indefinitely if determination are nary returns connected concern successful sight.
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However, immoderate AI hyperscalers are really making wealth from AI close now, and determination is simply a wide pathway to making more. How is Microsoft (NASDAQ: MSFT) doing it? Let's instrumentality a look.
There are 2 superior ways Microsoft is making wealth from AI: Copilot and Azure.
Let's commencement with Copilot, Microsoft's AI instrumentality that it has embedded into astir each Microsoft Office product. Subscribers indispensable wage other to entree this add-on, which has allowed Microsoft to boost its revenues from its halfway bundle offerings. However, it's acold little breathtaking than Azure.
Azure is Microsoft's unreality computing division, which is seeing beardown maturation arsenic a effect of expanding AI demand. Azure grew its gross by 39% twelvemonth implicit twelvemonth successful the 4th quarter, and that maturation complaint would person been adjacent higher if Microsoft had leased much of its caller computing capableness to outer customers alternatively than dedicating it to interior use.
The thought down unreality computing is reasonably simple: Microsoft builds excess computing capableness and past rents that retired to customers that request it. Most companies deficiency the resources and expertise indispensable to physique their ain AI information centers. So, they are perfectly contented renting from Azure. Furthermore, astir clients don't privation to support an plus similar a information halfway connected their equilibrium sheet.
Azure is simply a usage-based oregon subscription-based service; either way, Microsoft makes much wealth arsenic its work gets utilized more. As AI request rises, truthful volition Microsoft's revenue. Currently, Microsoft is successful the process of expanding its capableness truthful it tin fulfill a monolithic $625 cardinal backlog for AI computing. This is what's spurring Microsoft to walk much connected AI computing capacity, arsenic what is already online isn't adjacent to what would beryllium needed to tally an AI-first economy.
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