Microsoft Reassesses AI Infrastructure Plans Amid CEO Skepticism

Microsoft continues to navigate the complexities of AI investment, with analysts from Bank of America Securities and Bernstein maintaining Buy ratings on the stock, citing a commitment to an $80 billion capital expenditure plan focused on AI and cloud infrastructure. CEO Satya Nadella recently expressed skepticism about the current economic value of AI, criticizing industry hype surrounding artificial general intelligence (AGI) as 'nonsensical benchmark hacking' and emphasizing the need for measurable economic growth instead. This comes amid reports that Microsoft has canceled leases for significant data center capacity and reallocated international spending towards U.S. operations, reflecting a strategic recalibration. Despite these moves, Nadella assured that the company remains committed to its substantial infrastructure investments. The changing landscape is underscored by competition from startups like DeepSeek, which has introduced cost-effective AI solutions, raising concerns about the sustainability of major AI investments. Overall, Microsoft’s approach reveals a balancing act between ambitious AI goals and the necessity for tangible results in a fluctuating market.