Why did Microsoft's stock price fall by 12 percent?

Microsoft's stock price dropped 12 percent due to a software industry sell-off and concerns over its substantial artificial intelligence investments, coupled with a reported slowdown in its Azure cloud computing growth.

What is the current financial situation of OpenAI?

OpenAI, a significant investment for Microsoft, has accumulated nearly $100 billion in debt and faces predictions that it could exhaust its funds within the next 18 months.

What are the challenges facing Microsoft's Azure growth?

Azure's growth has slowed, and Microsoft forecasts continued stable but moderated growth due to AI chip capacity constraints, impacting the company's overall valuation and investor confidence.

Home / Technology / Microsoft Stock Plummets Amid AI Investment Fears

Microsoft Stock Plummets Amid AI Investment Fears

30 Jan

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Summary

Microsoft stock dropped 12% amid software industry sell-off.
Azure cloud growth slowed, impacting company valuation significantly.
OpenAI, a major Microsoft investment, faces financial concerns.

Microsoft Stock Plummets Amid AI Investment Fears

Microsoft's stock experienced a significant 12 percent slump, marking its worst day since March 2020 and resulting in a valuation loss of approximately $400 billion. This decline is attributed to broader software industry sell-offs and specific concerns regarding Microsoft's substantial investments in artificial intelligence.

The company reported a slowdown in growth for its Azure cloud computing product. Capital expenditures surged by 66 percent in the second quarter, reaching a record $37.5 billion. Microsoft forecasts Azure growth to remain stable at 37 percent to 38 percent for the January to March period, but this follows a slower growth phase in late 2025, partly due to constraints in AI chip capacity.

Further pressure stems from Microsoft's close ties with OpenAI, its significant investment holding. OpenAI accounts for 45 percent of Microsoft's cloud backlog, raising worries about potential financial risks. OpenAI itself has accumulated nearly $100 billion in debt, with some analysts predicting it could run out of money within 18 months. Competition is intensifying, with OpenAI issuing an internal "code red" after positive reviews for Google's Gemini 3 and facing challenges from Anthropic's Claude Code.