"The reason we talked about that number is because 55% or roughly $350 billion is related to the breadth of our portfolio, the breadth of customers, across solutions, across Azure, across industries, across geographies, she said. That is a significant RPO balance, larger than most peers, more diversified than most peers. And frankly, I think we have super high confidence in it."
"Of particular concern was the fact that 45 percent of Microsoft's $625 billion backlog was directly attributable to OpenAI. As part of OpenAI's restructuring as a public benefit corporation last fall, Microsoft revealed OpenAI had contracted to purchase an incremental $250 billion in Azure services. In exchange, Redmond would give up the right of first refusal to be OpenAI's compute provider."
"Left out of Hood's analyst commentary, but conspicuously noted in Microsoft's earnings slides, was the fair portion of that growth driven by OpenAI rival Anthropic. As you may recall, back in November, Anthropic committed to purchasing $30 billion of Azure compute capacity from Microsoft with an additional commitment to support the deployment of up to a gigawatt of compute capacity."
Microsoft posted a 60% year-over-year profit surge to $38.5 billion on $81.3 billion in revenue, yet shares fell 6% after-hours amid investor caution. Analysts pressed leadership for assurances about the cloud business’s heavy dependence on AI model makers and the large capital expenditures required to serve them. Approximately 45% of a $625 billion backlog was attributable to OpenAI, which committed an incremental $250 billion in Azure services and relinquished Microsoft’s right of first refusal for compute. CFO Amy Hood said the remaining roughly $350 billion of RPOs is broad-based and growing 28% year-over-year. Anthropic also committed $30 billion and up to a gigawatt of compute.
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