Microsoft rattled investors after reporting record artificial intelligence spending alongside slower-than-expected cloud growth, raising concerns about when its massive AI investments will meaningfully pay off. Nadella emphasized that much of Microsoft’s AI spending supports its own products, which have historically delivered strong lifetime value. Overall, Microsoft’s cloud backlog more than doubled to $625 billion, underscoring strong demand, though excluding OpenAI, backlog growth was a more modest 28%. As Microsoft, Alphabet, Meta, and Amazon collectively prepare to spend over $500 billion on AI this year, investors are increasingly scrutinizing whether Big Tech’s AI ambitions will generate sustainable returns. While Microsoft insists AI adoption is still in its early stages, patience in the market appears to be wearing thin.