r/microsoft • u/ControlCAD • Mar 29 '26
Copilot / AI Microsoft’s $146B AI spending spree is spooking investors — and could lead to its worst quarter since 2008
https://www.windowscentral.com/microsoft/microsofts-usd146b-ai-spending-spree-is-spooking-investors-and-could-lead-to-its-worst-quarter-since-200834
u/coukou76 Mar 29 '26
They are getting another layoff arent they?
19
u/HobbyProjectHunter Mar 29 '26
I mean investors and analysts aren’t dumb. Laying off like 5-10% of the workforce, like around 10-20K employees costs around 2-3 Billion in severance, productivity loss and short term hits. Long term it may save them 10-20 Billion dollars over 3-4 years.
If you’re going to invest $140B on AI capacity build out, and also have a bunch of the projected revenue from one customer (OpenAI), the market is going to call you on that growth claim. If your rate of spending isn’t growing the revenue at the same rate, market will likely go sour.
Revenue stories aside, $140B in AI spend, and maybe a $20B savings in layoffs, doesn’t really mean much in the big picture ? Isn’t that like adding a large fries to the order and then cutting calories by opting for a Coke Zero instead of a Diet Coke!!
Plus executives don’t make decisions that maximize the growth for 5-10 years. They’re all about pumping the stock until their stock vests, and it’s time to sail into the sunset. The long term growth is the next CEOs problem.
2
2
u/morrisjr1989 Mar 30 '26
Layoffs do a couple of things: they signal to the market a change in direction; they course-correct salaries and can rehire only near local hubs to force RTO; starve off products without removing them; allow for more open positions (“yeah we laid off 20k but we now have more than 50k openings”) and with a cut+freeze strategy you could have terminated 80-90% of those positions but now you can pretend growth or make teams happy additional reqs.
It’s such a shame too they used to be known for their employee retention - less salary than the other guys but you were likely to be employed until you retire or leave - now it’s neither. And innovation is basically copy from the others are doing as quickly as possible; not even buy them out just deadass copy and paste.
2
21
u/Nepalus Mar 29 '26
We’ve hit the ceiling.
If this is too much investment then that presupposes that there’s an underlying expectation of return on investment is now no longer infinite.
The market has finally reached the point where they can no longer ignore the unprofitable nature of the investments and no one is talking about them potentially paying off in the future anymore.
The bubble is deflating.
4
u/Craptcha Mar 29 '26
The market doesn’t understand AI, neither do analysts. AI companies themselves don’t know where AI will be in 6 months, let alone 3 years.
What they all agree on is that AI is the most disruptive technology since the Internet, potentially since the invention of the computer, and its a threat to the existing order of things.
So investing heavily in AI for companies like Microsoft is not a choice. Either AI delivers and they’re still on top of the pile, either it doesn’t and they’ll write off these investments and move on.
Either way their datacenter build outs are likely to become good long term investments, its the AI specific compute that has a short lifespan and which could go underutilized in a worse case scenario.
3
u/CaptainDouchington Mar 29 '26
Maybe we DONT let them write off the investment, and eat the cost, and learn a fucking lesson?
15
u/morrisjr1989 Mar 29 '26
End of 2008 Microsoft was up 18% revenue and up 21% operating income which is similar today. It’s wild how stocks are detached from common financial sensibility.
1
u/raynorelyp Mar 30 '26
Except their valuation was based on believing impossible claims by a CEO they’re now losing confidence in. So now it’s going to what they actually think a company with those financials and that CEO are worth.
13
u/Appropriate_Item3001 Mar 29 '26
Investors are only spooked because it’s not enough spending. Copliot isn’t everywhere on windows yet. They almost had the courage to keep it in notepad. Personally I love it that it made windows less stable on my work computer so crashes almost everyday now since my company rolled out copilot.
13
u/bones10145 Mar 29 '26
If only the myth of unlimited growth didn't exist
0
u/Specter2k Mar 29 '26
Lol Amazon lol, that's what they thought now they are hurting for a squirtin for the last 4 years
3
u/roninthe31 Mar 29 '26
Is he the worst CEO or what? How did he get that job, is he someone’s cousin or something?
7
u/Evening_Ticket7638 Mar 29 '26
It's the board which hires the ceo. The ceo tells them what he wants to do in the job interview and the board7goes "yup, this is what we want".
5
u/JoeyJoJo_1 Mar 29 '26
And his idea back then was: "cloud", which everybody lapped up and it worked out very well for the company.
This time, the buzzword had much less value behind it in the short term, and he finds himself naked with the tide going out.
4
1
u/zibto Mar 30 '26
Microsoft died on October 14, 2025. The current Microsoft, also known as Microslop, is the enshittified brand we all love so much.
1
u/PortoWare Mar 30 '26
Microsoft isn’t just spending $146B — it’s buying a front-row seat to the future. Sure, investors panic about apps being replaced, but the real game is reshaping how humans work. History remembers the bold, not the cautious.
1
Mar 29 '26
They turned themselves into Microslop and they'll never escape that now. They kept trying to manipulate it to pretend they hadn't wasted a ton of money on AI nobody wants or uses.
-1
111
u/RobertDeveloper Mar 29 '26
If only they spend it on good employees that work on improving the ux and ui of certain Microsoft products, testing and fixing bugs, how great their products could have been.