# Microsoft Lowers 2026 Capex Forecast Amid AI Capacity Delays Third-party infrastructure bottlenecks force a rare downward adjustment in Microsoft's massive AI spending plan. - **Source:** [Business Insider](https://www.businessinsider.com) - **Published:** 2026-10-28 - **Topic:** [Business](https://brifing.si/c/business) - **Original article:** - **On Brifing:** https://brifing.si/s/886049a3-6a2f-4cee-8a79-932b37fc87ef ## Capex Forecast Adjustment Microsoft has revised its 2026 capital expenditure forecast downward to $170 billion, marking a shift from the previous $175 billion estimate. This rare reduction in spending projections comes as the company navigates complex infrastructure scaling challenges. CFO Amy Hood confirmed this adjustment during the fiscal first-quarter earnings call held on Wednesday. ## Third-Party Capacity Bottlenecks The primary driver for the revised forecast is a delay in third-party capacity, specifically regarding GPU-as-a-Service contracts. Microsoft relies on external providers to meet surging AI demand, but these resources are now expected to arrive in the second half of the fiscal year. These delays reflect broader industry-wide infrastructure constraints. ## Azure Revenue Performance Despite the infrastructure delays, Microsoft reported strong financial results for the quarter ending September 30. Azure cloud revenue surged by 48%, significantly exceeding market expectations. Total company revenue reached $92.3 billion, representing a 19% increase. These figures highlight the robust demand for AI services despite the current supply chain limitations. ## Workforce and Headcount Trends Microsoft reported a 2% decline in total headcount during the first fiscal quarter. The company recently offered buyouts to over a quarter of its workforce, though management expects fewer than 5% of eligible employees to accept. CFO Amy Hood emphasized that internal growth opportunities remain a primary driver for employee retention. ## Infrastructure Scaling Challenges The delays in third-party capacity are likely linked to broader issues affecting AI data center projects, including electricity shortages and local opposition. These systemic hurdles complicate the rapid deployment of high-performance computing clusters. Microsoft continues to manage these external dependencies while attempting to maintain its aggressive timeline for AI infrastructure expansion. ## Market and Investor Sentiment Wall Street has expressed growing concern regarding the massive capital investments cloud giants are pouring into AI infrastructure. Microsoft’s decision to lower its forecast stands out, as many competitors have consistently raised their spending targets. Following the earnings announcement, Microsoft shares rose approximately 3% in after-hours trading, reflecting positive investor reaction. ## Future Spending Trajectory Microsoft anticipates that capital expenditure will accelerate during the second half of the fiscal year as the delayed capacity finally comes online. This phased approach suggests that the current reduction is a timing issue rather than a strategic retreat from AI. The company remains committed to scaling its cloud infrastructure to support growth. ## Strategic Implications of Delays The reliance on external GPU providers introduces volatility into Microsoft's long-term infrastructure planning. By adjusting its capex forecast, the company demonstrates a disciplined approach to capital allocation amidst supply chain uncertainty. Stakeholders should monitor the second-half performance to see if the anticipated capacity arrival successfully meets the ongoing demand for AI. ## Sources covering this story - https://www.businessinsider.com/microsoft-trims-ai-spending-plans-to-170b-as-azure-revenue-surges-2026-10 — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._