Microsoft reported growth in its cloud business revenue for the third quarter of fiscal year 2026, with spending increases falling below expectations. According to Jin10, Microsoft's capital expenditure for Q3 rose by 49% to $31.9 billion, compared to the previously anticipated $34.9 billion by institutions. The total capital expenditure for the second quarter was $37.5 billion. Revenue from the Azure cloud computing division grew by 40% during the quarter, surpassing the 39% growth seen in the previous three months. This performance may alleviate market concerns, as Microsoft's Copilot365 assistant for enterprises has seen slow promotion, and its heavy reliance on OpenAI might have weakened its early lead in the AI race. Additionally, this growth helps justify the spending on data centers, which, despite putting pressure on cash flow, is expected to see major cloud service providers invest over $600 billion in AI infrastructure this year.