AI revenue run rate reached $13 billion, as the company reported $69.6 billion in revenue for the December quarter, up 12%, with earnings of $3.23/share, topping Wall Street's expectations by both measures.

Satya Nadella, CEO of Microsoft, said the spending was needed to overcome the capacity constraints that hampered the tech giant's ability to capitalize on AI.

Key tech stocks were a mixed bag in early trading Thursday after executives at Meta and Microsoft said they plan to keep pouring billions of dollars into AI – despite lingering anxiety over the launch of China-based DeepSeek’s AI model.

Microsoft on Wednesday forecast disappointing growth in its cloud computing business, sending its shares down 4.5% in after-hours trading as investors worry about big spending, elusive artificial intelligence revenue and competition from cheaper AI models from China.

Microsoft has moved surprisingly quickly to bring R1 to its Azure customers.

Microsoft MSFT.O has made Chinese startup DeepSeek's R1 artificial intelligence model available on its Azure cloud computing platform and GitHub tool for developers, the U.S. company said on Wednesday. The AI model will be available in the model catalog on the platforms and will join more than 1,800 models that Microsoft is offering.

KEY TAKEAWAYS Bloomberg is reporting that Microsoft and OpenAI are investigating whether a group linked to Chinese startup DeepSeek used improperly obtained data from the American AI company to launch the low-cost AI model that sparked a selloff Monday.