Microsoft’s Azure cloud business brought in $33.2 billion in revenue in the September quarter, up 48% from a year earlier, blowing past the company’s own forecast and beating Wall Street’s expectations.

The growth suggests that Microsoft is selling cloud and AI computing about as fast as it can install it. Azure revenue rose $10.8 billion from a year earlier, driven by demand for services across the platform, Microsoft said in its quarterly filing. That came even as some new data center capacity arrived late.

For investors worried about Microsoft’s record capital spending, it’s a sign that the company’s massive AI and cloud infrastructure buildout is turning into sales. Microsoft’s shares rose nearly 4% in after-hours trading following the earnings report.

Overall, Microsoft reported revenue of $92.3 billion for the first quarter of its 2027 fiscal year, up 19% and above the $90.75 billion analysts expected, according to Yahoo Finance. Earnings were $4.89 per share excluding the impact of its OpenAI investment, compared with expectations of $4.72.

It’s the first time Microsoft has reported Azure’s quarterly revenue figure, not just its growth. The disclosure is part of a new financial structure that took effect this quarter, splitting the company into two segments: Agents and Infra, and Devices and Consumer.

• Agents and Infra (Azure, Microsoft 365, Dynamics, LinkedIn’s recruiting and sales tools, and server and productivity licensing): Revenue rose 25% to $76.8 billion, above Microsoft’s forecast of $75.15 billion to $75.75 billion. Operating income rose 24% to $40.6 billion.
• Devices and Consumer (Windows, Xbox, and search and advertising): Revenue fell 3% to $15.5 billion, above Microsoft’s forecast of $14.7 billion to $15.2 billion. Operating income rose 2% to $5.4 billion.

Capital spending came in below Microsoft’s forecast. The company spent $45.2 billion, including finance leases, short of the more than $50 billion it expected. Some data center capacity that third parties were supposed to deliver in the quarter was delayed, the company said.

Google Cloud, which includes Google’s Workspace productivity apps, brought in $30.7 billion in revenue in the quarter, up 103% from a year earlier, Alphabet reported Wednesday afternoon.

Amazon reports earnings Thursday afternoon, including AWS results.

Update, 3:05 p.m.:Microsoft expects Azure growth to accelerate again this quarter, to 49% to 50% excluding currency changes, CFO Amy Hood said on the earnings call. “Customer demand continues to exceed available supply,” she said.

Hood said Azure’s growth came from Foundry, Microsoft’s service for building AI apps and agents, and from engineering work that let Microsoft sell unused capacity on its existing servers. That helped make up for delays in new data center capacity that outside providers were supposed to deliver.

Those delays pushed some spending later into the fiscal year. Microsoft now expects to spend about $170 billion on capital expenditures in calendar 2026, down from about $175 billion. It expects to spend more than $50 billion this quarter, and Hood said spending will accelerate in the first half of calendar 2027.

Hood also said Microsoft may tap additional sources of financing to help pay for the buildout, “when we believe it is attractive to do so.” The company still expects to bring in more cash than it spends this fiscal year.

Microsoft’s expense forecast for the December quarter includes an estimate for the buyout offer it announced Monday, Hood said, though she didn’t give the amount.

The company expects total revenue of $96 billion to $97.1 billion for the December quarter, above the $95.7 billion analysts expected, according to Yahoo Finance.

AI infrastructure startup Nscale is doubling down on its new Seattle-area presence before even opening the doors.

After initially leasing a single floor at The Eight tower in downtown Bellevue earlier this year, the London-based company has expanded by an additional floor, bringing its total footprint in the new development to approximately 46,000 rentable square feet, according to a report from The Broderick Group.

The expansion signals an aggressive ramp-up for Nscale’s primary U.S. engineering hub, slated to open in January 2027. While the initial 24,000-square-foot lease was pegged to accommodate up to 250 employees, the added space gives the fast-growing cloud provider room to scale its local team even further beyond its current 50 Seattle-area workers.

Founded in 2024, Nscale is riding a massive wave of capital and growth.

It raised a $2 billion Series C round at a $14.6 billion valuation earlier this year, backed by Nvidia, Dell, Citadel, Jane Street, and Point72, alongside a $900 million credit line.

The company also earlier this year hired Nidhi Chappell, the former Microsoft corporate vice president who led Azure AI and high-performance computing infrastructure, including the supercomputers that power ChatGPT. As Nscale’s new president of AI infrastructure, based in the Seattle area, Chappell will oversee the company’s global engineering and data center operations.

“I’ve had a front-row seat to some of the biggest moments in AI over the past several years, but one thing has always stood out: the world remembers the breakthroughs, but it’s the people building the infrastructure behind the scenes who make them possible,” Chappell wrote in a LinkedIn post earlier this year announcing the company’s first “onboarding” event in Seattle.

Nscale’s new office is set to open in January, with the second floor slated to open in June, reports The Puget Sound Business Journal.

The company’s growth underscores Bellevue’s growing magnetism for out-of-town AI players. The company joins a dense ecosystem of AI infrastructure and application hubs establishing outposts on the Eastside, including xAI, OpenAI, Databricks, CoreWeave, Armada, and Anduril.

Goldman Sachs is expanding its technology presence in the Seattle region, opening a new Bellevue engineering center that will accommodate more than 125 employees focused on artificial intelligence and cloud transformation.

The New York-based financial giant held a ribbon-cutting ceremony this month for the new office, its first dedicated space for engineers in the Pacific Northwest.

The Bellevue location adds to Goldman Sachs’ existing presence in downtown Seattle, where the company has maintained an office since 2001 for its banking and wealth management divisions.

“We are in a period of rapid technological change, but we know our people are still this firm’s greatest asset,” Goldman Sachs Chairman and CEO David Solomon said in a statement. “Hiring exceptional talent is central to how we adapt and grow.”

The move also puts Goldman Sachs in the company of a growing list of financial and technology companies that have established engineering operations in the Seattle area. GeekWire maintains a list of nearly 150 engineering hubs in the Seattle region here.

JPMorgan Chase established its Seattle Tech Center in 2018 and has steadily expanded it. The engineering hub has grown to about 400 employees and is now anchoring a new AI infrastructure team focused on controlling how the bank runs AI across its own data centers and outside cloud providers.

Goldman Sachs said its new Bellevue location comes amid growth at other facilities in Dallas, Salt Lake City and Warsaw. Earlier this month, the company hired Dinesh Keswani — a former Microsoft and GoDaddy engineering leader — to co-lead its core engineering team alongside Gopi Parameswaran. Keswani will also serve as chief technology officer of The Core Engineering.