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Microsoft and Meta just showed investors they have no plans to slow down their AI investments.
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Going into earnings, multiple analyst reports had suggested some Big Tech data center leases were being rethought.
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There are a few caveats to Microsoft and Meta’s AI growth story, however.
Is there a let-up in the AI mania? Big Tech doesn’t seem to think so.
Microsoft and Meta this week took turns explaining why they see no sign of weakening interest in the AI they’ve bet their futures on, reporting earnings that appeared to shrug off concerns over recent analyst notes suggesting wobbles in demand.
Meta said it was updating its guidance on capital expenditure for the year to $64-72 billion, up from $60-65 billion.
Meanwhile, Microsoft said its capital expenditure was up from $14 billion in the same quarter last year to $21.4 billion in the most recent quarter.
These are both signs that the two companies are willing to spend more and more on the critical infrastructure needed to host the AI services in high demand from customers.
Microsoft posted cloud unit revenue of $42.4 billion in the first quarter of 2025, beating analyst expectations. Revenue in the unit accounting for the AI data center services it provides to customers jumped 20% year over year.
A Jefferies analyst note, published Thursday, said that “AI demand is trending higher than expected” for Microsoft, pointing to the soaring number of AI tokens the company processed in its third financial quarter.
The updates appeared to have done enough to convince investors that the AI boom is staying strong — Microsoft shares opened up more than 9% on Thursday, while Meta was up about 5% — despite recent reports suggesting a slowdown in demand for Big Tech data centers.
Last week, analysts at Wells Fargo published a report claiming that AI data center giant Amazon had paused some of its data center leasing discussions. In response, an Amazon Web Services executive said there was still “strong demand” to provide the technology underpinning the AI boom.
Microsoft CEO Satya Nadella addressed anxieties about data center pauses in a call with investors on Wednesday, as his company had also been the subject of a report earlier this year claiming that it was canceling lease commitments.
During the call, he said he felt “very, very good” about the pace at which his company’s data center expansion was taking place.
Microsoft’s chief financial officer, Amy Hood, said the company had a “customer contracted backlog of $315 billion” for server technology like graphics processing units, or GPUs.
