Microsoft's Heavy AI Spending Drives Worst Quarter Since Financial Crisis

Microsoft faces a critical investor test as massive AI infrastructure spending fails to deliver expected revenue growth, contributing to a 25% stock decline in Q1. The slump reflects growing concerns that AI startups like Anthropic could disrupt Microsoft's core business model, while Azure's deceleration and Copilot's weak adoption raise execution questions. This marks the tech giant's worst quarter in 16 years, signaling investor doubts about whether Microsoft will maintain its competitive edge in the AI era.