Microsoft’s quarter turns AI into a scale problem across cloud and Copilot

July 31, 2026

Microsoft said in its fiscal Q4 2026 results that quarterly revenue reached $90.0 billion, Microsoft Cloud revenue reached $59.3 billion, Azure grew 43% and passed $100 billion in annual revenue for the first time, Microsoft 365 Copilot passed 30 million paid seats, and capital spending reached about $41 billion. On the earnings call, Satya Nadella said Microsoft is building a unified Copilot "super app" that will combine Copilot chat, GitHub Copilot, Copilot Cowork and Autopilots for consumer and commercial users, with rollout planned later in 2026.

OpenAI cut prices for its GPT-5.6 models, reducing Luna by 80% and Terra by 20% across its API and paid subscriptions, and added a Fast mode for GPT-5.6 Sol at twice the standard price. Amazon said AWS revenue grew 36.7% year over year in Q2 2026 and that its AI revenue run rate has exceeded $25 billion with triple-digit year-over-year growth.

This is likely to change what Microsoft’s quarter means: the numbers no longer read mainly as evidence that one company found demand, but as evidence that AI demand is now large enough to force several clouds to spend and expand at once. OpenAI’s price cuts also suggest that model quality is being pushed towards a utility market in which price, speed and distribution matter more in day-to-day buying than the mere existence of another frontier model. In that setting, Microsoft’s attempt to pull its Copilot products into one app appears to matter because distribution and account control become part of the product itself, not just a way to market it. AWS’s figures, read alongside Microsoft’s, also suggest that Microsoft cannot treat AI infrastructure growth as a temporary advantage that belongs to Azure alone.