Microsoft’s $440 billion wipeout, and investors angry about OpenAI’s debt, explained
Microsoft’s $440 billion wipeout, and investors angry about OpenAI’s debt, explained
Microsoft’s $440 billion wipeout, and investors angry about OpenAI’s debt, explained | Fortune
Microsoft’s stock has plummeted 12% owing to a slight miss on revenue, showing how spooked investors are by the “spend now, profit later” AI market.
The immediate catalyst, it seems, is an intensifying focus on capex, or capital expenditures. Microsoft revealed that its spending surged 66% to $37.5 billion in the latest quarter, even as growth in its Azure cloud business cooled slightly. Even more concerning to analysts, however, was a new disclosure that approximately 45% of the company’s $625 billion in remaining performance obligations (RPO)—a key measure of future cloud contracts—is tied directly to OpenAI, the company revealed after reporting earnings Wednesday afternoon. (Microsoft is both a major investor in and a provider of cloud-computing services to OpenAI.)