Microsoft: strong AI revenues, pushback

Microsoft is turning artificial intelligence demand into real sales, even as the buildings that power that demand are running into local resistance. (microsoft.com, cbsnews.com) In Microsoft’s fiscal fourth quarter, Azure and other cloud services revenue grew 39%, and Chief Executive Officer Satya Nadella said cloud and artificial intelligence were driving business transformation across industries. (microsoft.com, microsoft.com) Earlier in fiscal second quarter results released January 29, 2025, Microsoft said Azure revenue grew 31%, with 13 percentage points of that growth coming from artificial intelligence services that rose 157%. (microsoft.com, microsoft.com) That growth depends on data centers, the warehouse-sized facilities packed with chips, servers and cooling equipment that train and run artificial intelligence models. CBS News reported that more than 4,000 data centers are operating across the United States as technology companies race to add capacity. (cbsnews.com) The expansion is colliding with local politics over electricity, water and tax breaks. CBS reported that residents in several communities are pushing back over environmental costs and public subsidies tied to new projects. (cbsnews.com) Microsoft has been one of the companies trying to build ahead of demand. On its January 2025 earnings call, the company said it had a commercial remaining performance obligation of $298 billion, up 34%, and said the increase was driven by long-term Azure commitments that included OpenAI. (microsoft.com) That backlog helps explain why Microsoft keeps spending on infrastructure even when supply is tight. On the same call, the company said artificial intelligence capacity constraints were expected to remain beyond June 2025. (microsoft.com) The resistance is no longer isolated to one town or one state. NBC News reported in late 2025 that opposition to new data centers was “accelerating,” citing a study that found more coordinated local and state campaigns against projects tied to the artificial intelligence boom. (nbcnews.com) In Wisconsin, the backlash has moved from public meetings to the ballot box. Politico reported on April 7, 2026, that Port Washington voters were considering a referendum that could require voter approval before city leaders grant large tax incentives for future data center projects. (politico.com) Microsoft’s position is now straightforward and uneasy at the same time: demand for Azure and Copilot keeps rising, but every new burst of artificial intelligence revenue still has to be matched by a physical buildout that neighbors and local officials can slow, reshape or block. (microsoft.com, cbsnews.com)