Microsoft’s Cloud & Token Factory: The AI Infrastructure Play

At Layer 1, Microsoft is building the foundation: the Cloud & Token Factory. The key metric? “Tokens per watt per dollar.”

Global Footprint

  • 400+ datacenters
  • 70 regions
  • +7 new this quarter
  • +1 GW capacity added in a single quarter

Custom Silicon

Maia 200

  • Launched January 2026
  • 10+ petaFLOPS @ FP4
  • +30% TCO improvement
  • 216GB HBM3e memory
  • 3nm process

Cobalt 200

CapEx Investment

  • $37.5B Q2 CapEx (½ GPUs/CPUs, ½ long-lived assets)
  • $120B+ FY26 guidance
  • $49.3B H1 actual

Efficiency Gains

Throughput improvement: +50% OpenAI inferencing

Multi-Vendor Fleet Strategy

NVIDIA + AMD + Maia

“We don’t want to be locked into any one thing… It’s not a one-generation game. You have to be ahead for all time to come.”

— Satya Nadella

Sovereignty Solutions

Type Product Control
Public Azure Microsoft managed
Private Azure Stack Customer premises
National Partner Local Control In-country operation

The Takeaway

First self-funding AI buildout: $35B+ cash flow → $120B+ CapEx

“Much of the GPUs we’re buying are already contracted for most of their useful life. They’re already sold for the entirety of their useful life. The risk isn’t there.”

— Amy Hood, CFO


This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.

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