Microsoft capital spending jumps, cloud revenue fails to impress, shares drop after hours

Microsoft said on Wednesday it had spent a record amount on artificial intelligence in the last quarter and posted slower cloud-computing growth, worrying investors who had expected a major payoff from the ⁠outlay and its mega-deal with OpenAI. Microsoft’s shares tumbled 6.5% in after-market trading after the company released its fiscal second-quarter financial results. The tech giant’s strategic partnership with OpenAI, which plans to spend at least $281 billion with Microsoft, was once seen by investors as its strongest competitive advantage in the artificial intelligence race. But that has morphed into a possible drawback for the Redmond, Washington-based firm as Google’s Gemini makes progress in winning massive customers such as Apple.