Microsoft news covering Windows, Azure, Office 365, Xbox, Copilot AI, LinkedIn, earnings reports, and enterprise software developments.
Microsoft is terminating its agreement to rent artificial intelligence computing capacity from Oracle, as the capacity no longer met the company's evolving technical needs. The news caused Oracle shares to drop nearly 3 percent in afternoon trading, while Microsoft stock remained largely unchanged.
Microsoft and Oracle reported contract backlogs of $677 billion and $664 billion respectively, underscoring surging demand for AI infrastructure. Goldman Sachs projects hyperscaler spending will reach $1.2 trillion by 2027, driven by strong cloud revenue growth at both firms.
Microsoft rejected an option to expand its computing power rental contract with UK AI startup Nscale, citing pending regulatory approval for energy connection. Uncertainty rises in Texas as Governor-elect Gina Hinojosa proposed banning new projects until industry rules are passed.
IREN stock sank 9% after reports linked delays at its Texas Childress campus to Microsoft's $5 billion AI spending shortfall. Broader cloud stocks also dropped amid investor concerns over regulatory impacts from Democratic congressional gains and delayed third-party capacity deliveries for Nvidia-powered servers.
Microsoft and Amazon stocks rose sharply on Wednesday, adding $400 billion in combined market value. Investors believe new political scrutiny of data-center construction could limit supply, potentially allowing cloud providers to raise prices and benefit from reduced competition.
Microsoft Clarity unveiled new features including Agentic Analytics to track AI agent behavior and Brand Agents to boost product visibility in search results. These updates aim to help merchants adapt to the growing trend of AI-assisted shopping.