Last quarter Azure grew 40%, ahead of 37-38% guidance

AI is now one of Microsoft’s largest growth engines, as its AI business surpassed $37B.

Copilot paid seats crossed 20M.

GitHub Copilot reached ~140,000 orgs, with enterprise subscribers ~3X.

Security Copilot customers 2X.

AI monetization is increasingly tied to usage, not just seat expansion

Amy Hood framed it directly: “if you think about getting work done and being more productive, it’s thinking about being a seat or a worker plus an agent.

And when I think about that model, I start to think about it as a license business plus a consumption business, and really applying far more broadly than I think people have thought about that.”

Satya Nadella reinforced: “The basic transformation of, I’ll say, any per-user business of ours, whether it’s productivity, coding, security, will become a per-user and usage business.”

This is already happening.

GitHub Copilot moves to usage-based pricing on June 1.

~60% of Dynamics 365 service customers already purchase usage-based credits. Copilot Credit consumptive offer ~2X QoQ as customers extend Copilot with custom agents.

When Microsoft moves its own products to include consumption, it normalizes usage-based purchasing across its entire customer base.

Azure’s AI platform story is moving beyond “Azure OpenAI”

Microsoft is now positioning Foundry as the enterprise multi-model platform. 10,000+ customers used more than one model on Foundry. 5,000 used open source models. The number using both Anthropic and OpenAI 2X QoQ.

The strongest Azure AI partner story is no longer about integrating with one model. It is helping customers orchestrate the right models, data, governance, and workflows across the platform.

The data layer reinforces this.

Cosmos DB grew 50% YoY driven by AI workloads. Fabric reached 35,000 paid customers, up 60%.

15,000+ customers now use both Foundry and Fabric, connecting agents to operational and analytical data.

Microsoft’s commercial RPO remained roughly flat QoQ at $627B

We estimate Azure commits at ~$430–440B, including OpenAI. For the split see the slide and our last quarter breakdown.

CapEx was $31.9B last quarter. Microsoft still expects demand to exceed supply through 2026, as it guided $190B for CY2026 - one of the largest AI infra bets.

Three takeaways for alliance leaders:

1. Prepare for usage-based pricing, as Microsoft and others are making consumption the default language of enterprise AI purchasing

2. Build your Azure partner story around multi-model orchestration and data integration, not a single model dependency

3. Show how your solution drives Azure consumption and moves AI into production to get more attention

Are you rethinking your Azure strategy given 40% growth?