Microsoft Increases 2026 AI Budget by $25B Amid Costs Rise

Microsoft has announced an increase in its 2026 capital expenditure to $190 billion, with $25 billion specifically allocated to cover rising component costs. This surge in cost is attributed to an unprecedented spike in memory and storage prices, which have tripled in some cases due to high demand for AI infrastructure. Despite these challenges, Microsoft remains resolute in its commitment to expanding its compute capacity, having already spent $32 billion in the last quarter alone.