Microsoft's $13B AI Run Rate: Doubling Growth and Capacity Constraints

Microsoft reported over 30% annual growth with AI services on a $13B run rate, more than double year-over-year, driven by Azure's 31% growth including 157% YoY AI services expansion. Data center capacity remains the limiting factor through Q3 2025, but Microsoft projects alignment with demand by fiscal year-end through massive capital investments. With $300B in remaining performance obligations and 200,000 engineers building on Azure AI Foundry within two months of launch, AI software optimizations are delivering 10x performance gains per model generation.