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Hi {{first_name|everyone}},
Microsoft just spent $45.2 billion on capex in a single quarter, and Nvidia is quietly sitting right in the middle of where a lot of that money lands. We’re looking at what that spending says about AI demand. Plus, we’ve got a few handy new tools, a Codex-built AC controller for the Mac, and a digital wax seal stamp you can actually press. Let’s get into it.
🤿 DEEP DIVE
Microsoft Is Still Buying the Chips
And Nvidia is right in the middle of it.
Apparently, the AI spending spree isn't slowing down just yet.
At least not at Microsoft.
So Microsoft just reported its latest earnings, and buried in all the revenue numbers was a pretty ridiculous detail. The company spent $45.2 billion on capital expenditures in a single quarter.
And roughly three-quarters of that went toward CPUs, GPUs, and data center networking equipment.
That's about $34 billion on the hardware side of things in 3 months. Which is particularly interesting if you're Nvidia.
Follow the money
Okay, so Nvidia has been one of the biggest winners of the AI boom. Its stock climbed more than 1,200% over the past 3 calendar years, and its data center business now accounts for roughly 92% of its revenue.
Basically, Nvidia's business has become heavily tied to how much money companies like Microsoft are willing to spend building AI infrastructure.
And lately, investors have been getting nervous about that spending.
The concern isn't necessarily that AI demand has disappeared. It's whether Big Tech is spending too much money building all these data centers without getting enough revenue back.
Microsoft's latest numbers offer an interesting counterpoint.
Its Azure cloud business grew 48% year over year, and the company is already expecting another 49% to 50% growth next quarter.
Meanwhile, Microsoft's finance chief Amy Hood said something that pretty much explains why the spending continues.
"We still have demand that exceeds supply."
In other words, Microsoft isn't just buying more hardware for the sake of buying more hardware. According to the company, customers are asking for more computing capacity than it can currently provide.
And the spending isn't finished
Microsoft expects capital spending to exceed $50 billion next quarter, with roughly $170 billion planned for the calendar year.
There's another small detail worth noticing here.
Nvidia recently launched Vera, its first stand-alone CPU designed specifically for AI agent workloads.
So while Nvidia is already a major supplier of GPUs used in AI data centers, it now has a CPU product competing for another part of that infrastructure budget.
That doesn't mean every dollar Microsoft spends on chips goes to Nvidia, of course. The spending category includes several types of hardware.
But it does explain why Nvidia investors pay such close attention to Microsoft's earnings.
The awkward part of all this
Investors are starting to treat AI spending differently depending on whether the companies doing the spending can show financial returns.
Microsoft's shares rose more than 5% following its results, partly helped by positive free cash flow.
Alphabet, meanwhile, fell roughly 10% after hours following disappointing search results and negative free cash flow, even though it also plans to spend heavily on infrastructure.
Same broad AI spending story. Very different investor reactions.
And I think that's the useful distinction here.
The question is no longer just how much money Big Tech is pouring into AI.
It's whether that spending is producing enough business to justify continuing.
For Nvidia, Microsoft's latest results suggest that one of its biggest customers still has plenty of reasons to keep ordering hardware.
And with Nvidia's own quarterly results coming in November, we'll get another look at how much of that spending is actually reaching the chipmaker.
The quick take
Microsoft spent $45.2 billion on capex in its latest quarter, with roughly $34 billion going toward chips and networking equipment.
Azure revenue grew 48%, and Microsoft says demand for computing capacity still exceeds supply.
Nvidia gets roughly 92% of its revenue from data centers, making Big Tech infrastructure budgets particularly important.
The big question is shifting from how much companies spend on AI to whether that spending generates enough revenue to justify the cost.
🤝 FROM OUR FRIENDS
A quick share we thought you might find useful
From invisible to first in ChatGPT.
Bob's Your Uncle has spent twenty years helping challenger brands win their categories. But when buyers asked ChatGPT about their own category, the agency didn't show up.
With ChatFeatured, their AI visibility went from 7% to 22% in 90 days, and they went from invisible to first in ChatGPT.
They're not the only ones:
Vessel: AI visibility up 2,200%+
SCOJO: AI visibility up 160%
WikiSleep: brand mentions up 113%
ChatFeatured finds the questions where AI leaves you out, writes the content that gets you cited, and reports the lift every week. Your team decides what ships.
Most customers see their first citations inside 7 days.
⚒ TOOL SNAPSHOTS
Futuristic tools within AI, no-code, and productivity
🗺️ Xmind 2027
Map out ideas with AI in a shared visual workspace.
Why it’s useful
Use it to research, develop ideas, and weigh options in a mind map that updates as your thinking changes. With MCP, you can carry that same context into ChatGPT or Claude while you steer the direction.🔬 ClawsGO Science
Turns a question into a cited paper with discovery.
Why it’s useful
You can take a research question through discovery and end up with a cited write up. Handy for teams running longer experiments using its cloud lab tools and datasets with agent clusters over days.🎤 Cedric
Covers your calls by presenting slides and answering questions.
Why it’s useful
Cedric can join your Zoom, Meet, or Teams calls to present your slides, answer questions with live tool data, and handle notes. If you join late or cannot make it, he catches you up or represents you, then runs approved follow ups after.
🤖 AI MADE THIS
Interesting and inspiring creations made with AI
Digital Wax Seals You Can Stamp
The Bugged Dev used Claude Opus 5.5 to build a virtual wax-stamping experience that looks surprisingly realistic. You can choose different seals, change the wax color, and press a stamp onto a digital letter.
AI used:
Claude Opus 5.5. The creator says the project was built in one pass using the model. Claude generated the code for the interactive experience, while browser graphics technology renders the wax and stamping effects.
👀 ON OUR RADAR
One more thing we thought you'd like
Your Search Bar Is Haunted
Shoppers type exactly what they want and get “0 results found” back. They don’t complain. They just vanish to a competitor.
Gladly understands what shoppers mean, typos and all, and turns dead-end searches into product recommendations.
🔥 WHAT’S THE BUZZ
What people are building, sharing, and talking about
A developer used Codex to reverse-engineer his air conditioner's Android app and create a Mac menu bar controller. Instead of reaching for the remote or opening the manufacturer's app, he can now control the AC directly from his computer.
____
A good example of AI helping people solve small, personal frustrations. Instead of waiting for a company to improve its software, technically inclined users can increasingly create their own solutions around devices they already own.
ℹ️ ABOUT US
The Intelligent Worker helps you to be more productive at work with AI, automation, no-code, and other technologies.
We like real, practical, and tangible use-cases and hate hand-wavy, theoretical, and abstract concepts that don’t drive real-world outcomes.
Our mission is to empower individuals, boost their productivity, and future-proof their careers.
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