Microsoft
What Microsoft is up to now
New 09-02 (recorded 09-03): 8-K at 16:30 ET — from FY27 Microsoft reports TWO segments, "Agents and Infra" and "Devices and Consumer," replacing the three-segment structure, with quarterly revenue disclosed per key business (Azure in dollars for the first time, per Reuters); historicals restated, FY27 Q1 outlook adjusted. Nadella: AI is "blurring the boundaries between our products and reshaping our business models." The capex-to-revenue question becomes answerable at the Azure line. Also 09-03: Astra ships on Azure at launch; Claude Fable 5.1 on Microsoft Foundry since 09-01. New 08-16: still quiet since 08-14 — no Microsoft-specific development in either day's sweep across any lens. Standing picture below holds. New 08-13: two developments, both about where Microsoft draws its own lines. A Reuters exclusive reports Microsoft has closed at least 15 branch offices and joint ventures in mainland China over the past five years, retreating under geopolitical tension, Chinese tech policy and domestic competition — but staying rather than fully exiting, because servicing Chinese multinationals like ByteDance (which need Western cloud/AI tools for overseas operations) remains profitable and a China presence preserves access to local engineering talent. US export controls and Beijing's post-2017 domestic-software push are named as the binding constraints on scaling further — a structural read on how far a hyperscaler retreats from China without leaving outright, and a contrast to Apple's opposite move the next day (going deeper into China with a local Alibaba-built model). Same day, Microsoft said it's merging its consumer and business Copilot apps and cutting features that didn't work — a consolidation move on the product side while the Maia in-house- silicon story (300,000+ units reportedly in talks with TSMC, due ~09-30) sits unchanged since 08-10. No further movement since 08-10 on the Maia 300 volume-order report or the Assuta Medical Centers health deal; both stand as logged. Standing picture: FY26 Q4 (07-29) beat on revenue ($90.0B, +18%) and EPS ($4.81, +32%), Azure accelerated to 43% constant-currency, but ~$3.2B of the EPS gain was an unrealized mark-to-market gain on its Anthropic stake (vs. its OpenAI stake marked DOWN ~$600M the same quarter) — the real operating beat is smaller than the headline. The OpenAI-vs-own-capex split still undisclosed; FY27 capex guidance stayed qualitative ("will grow year-over-year," next quarter "over $50B"). Copilot keeps swapping in-house MAI models in for OpenAI/Anthropic on cost grounds while lobbying with Nvidia/Meta against open-weight restrictions — buyer and hedger at once. Destination traced 07-27: the WI+GA ~2GW "superfactory" + Pecos TX ~2GW on Chevron gas; Maia 200 serves both OpenAI and MAI, split undisclosed.
as of 2026-09-03
The metrics
- Posture med
- hedging 2 src →
- Capital · available high
- ~$78.3B cash+STI (Mar-2026); ~$250B+ commandable/12mo incl. AAA debt access 3 src →
- Capital · operating high
- ~$170B/yr operating cash flow (TTM ended Mar-2026) 1 src →
- Capital · deployed high
- ~$97-107B/yr capex in-flight + $250B Azure/OpenAI compute earmarked 2 src →
- Capital · in high
- ~$318B TTM revenue (FY26 pace); Azure/cloud the growth engine 1 src →
- Capital · out high
- ~$145B/yr out: ~$97B capex + ~$26B dividends + ~$22B buybacks (TTM) 1 src →
- Optionality high
- mixed — legally free discretionary treasury, but a rising majority self-earmarked to the AI buildout (capex ~$107B/yr, up from $64.6B FY25) + ~$26B/yr dividend 2 src →
- Gravity high
- GROSS ~$3.0T/yr reconstructed ecosystem (the popular '$4T economy': TTM rev $318B x IDC partner multiplier) — undeflated per board policy 2 src →
Holdings
Dependents
This week — what changed
- 🕰 Microsoft's superintelligence lead publicly reframed the unit toward AI self-sufficiency, the clearest statement yet of the decoupling this thread tracks. ⚠️ Single-sourced — carried on that basis and flagged rather than held, because the thread's whole question is whether the decoupling is rhetoric or resourcing, and a public reframing by the person running it is evidence either way. Dated 08-27, caught by the cold rotation.
- Spot HBM is trading at four to five times long-term contract prices. Korean trade press puts spot HBM3E (36GB) near $2,100 against contract-equivalent pricing of roughly $350–490, and HBM4 (16-layer) spot near $3,500. The attributed causes are HBM4's lower yield consuming more DRAM wafer capacity per unit, and Samsung's already-recorded July commitment of 70% of capacity to long-term agreements starving the spot market. The report adds that Nvidia, Microsoft and Google reportedly cannot get their full contracted volumes. ⚠️ Figures are converted from Korean won — directional, not exact. (Seoul Economic Daily)
- 🕰 Correction, not addition: Microsoft's 07-29 earnings call did NOT leave FY27 capex guidance purely qualitative, as this map's own record stated. CFO Amy Hood gave a hard figure — "approximately $175 billion" — tied to a 15-to-25-year useful-life accounting change that shifts future leases from finance to operating classification; the map was right to reject the ~$255-260B analyst-preview number but wrong to call the guide purely qualitative. Caught by the cold rotation. (Earnings transcript via The Globe and Mail)
- Microsoft filed an 8-K at 16:30 ET collapsing its three reporting segments into two from FY27 — "Agents and Infra" and "Devices and Consumer" — with quarterly revenue disclosed for each key business, Azure included. Nadella's note: AI is "blurring the boundaries between our products and reshaping our business models." The capex-to-revenue question this map asks of every hyperscaler print becomes answerable at the Azure line. On Microsoft Capex. (Microsoft 8-K, Exhibit 99.1)
- Microsoft AI released MAI-Transcribe-2, an in-house speech-recognition model it says beats OpenAI's, Google's and ElevenLabs' equivalents on speed at $0.10 per audio hour — a 72% cut from its predecessor five months earlier, 60 languages, diarization and word-level timestamps. Its second domain-specific model after MAI-Cyber-1-Flash: narrow in-house models to compete in verticals rather than at the general frontier. ⚠️ Microsoft's own post could not be opened; figures from secondary coverage; release date 09-03 or 09-04. (Neowin, Unite.AI)
- Microsoft's 8-K of Wednesday evening restructures FY27 reporting into two segments — "Agents and Infra" and "Devices and Consumer" — with quarterly revenue disclosed for each key business, Azure included. Dated 09-02 and in that digest's late catch; noted here because it is the first time the capex-to-revenue question can be answered at the Azure line rather than inferred. (Microsoft 8-K, Exhibit 99.1)
- Microsoft put a number on how often Copilot reproduces the news content it was trained on, and the number is small. In discovery for the same copyright litigation it disclosed that of 8.2 million Copilot chat logs it turned over — logs its lawyers say were deliberately selected as those most likely to reference the plaintiffs' work — only 59,545 contained at least 16 words in common with the news content used to ground the model. A separate expert for the Center for Investigative Reporting found just 51 instances of substantial overlap with CIR's work. Microsoft is using the figures to argue Copilot "rarely reproduces even full sentences." Worth reading with the selection caveat attached: this is a filtered sample chosen to be maximally incriminating, which cuts in Microsoft's favour on the ratio and against it on the base rate. (The Verge)
- The Seattle Times and Newsday sued OpenAI and Microsoft in the Southern District of New York on Friday, alleging the companies scraped their journalism, including paywalled content, into training data for ChatGPT, Copilot and Bing's AI features, and seeking destruction of any training datasets and models incorporating the papers' work as well as damages. The filing lands three days after the DOJ's fair-use statement of interest and one day after OpenAI and Microsoft moved for summary judgment against the existing News Plaintiffs in the consolidated MDL; whether it is folded into MDL 1:25-md-03143 is not yet shown on the docket. (AP, via Cyprus Mail, The Spokesman-Review)
Projects & threads
Full item history for Microsoft →