Microsoft reported a record $35.8 billion net profit yesterday, a 31% climb, driven by heavy investment in artificial intelligence. This massive accumulation of capital by tech giants like Microsoft and Meta signals an accelerating shift towards AI-powered infrastructure and tools, raising critical questions about how such technologies could be deployed to reinforce Europe's border regime and further entrench social control.
The New Frontier of Control
The company's shares surged by as much as 10% in pre-market trading yesterday, following forecasts of stronger-than-expected revenue and accelerating growth at its Azure cloud business. Microsoft expects revenue between $89.85 billion and $90.95 billion in the July-September quarter, representing growth of 16% to 17%.
Azure revenue, a core component of this growth, is forecast to increase by approximately 45% in constant currency, up from 43% in the quarter just ended. This expansion of cloud infrastructure, described by Activate Consulting CEO Michael J. Wolf as Microsoft "winning on both fronts" by supplying enterprise AI infrastructure and monetising AI tools, represents a significant investment in technologies with dual-use potential.
Chief financial officer Amy Hood stated that Microsoft's capital expenditure plans for the 2026 calendar year remain unchanged, with guidance closer to approximately $175 billion. This immense spending, previously projected at $190 billion, is seen by investment strategist Bryan Hayes as "buying something real," reflecting confidence in the long-term returns on these investments, according to Microsoft's director of investor relations, Danielle Criste.
Profits Amidst Precarity
For the full fiscal year ended in June, Microsoft reported $331.8 billion in revenue. Azure revenue surpassed $100 billion for the first time. CEO Satya Nadella highlighted that Microsoft 365 Copilot reached over 30 million paid seats, indicating widespread adoption of AI tools in daily work.
While Microsoft celebrates record profits, Meta Platforms, another tech giant heavily investing in AI, reported a 14% decline in second-quarter profit, earning $15.85 billion in the April-June period. This decline occurred despite revenue growing 28% to $60.8 billion, beating Wall Street's expectations.
Meta's total costs and expenses jumped 55% to $42.03 billion, including $2.4 billion in charges related to legal proceedings and $1.18 billion in severance expenses. These severance costs are directly linked to Meta’s May workforce reduction, highlighting how the "AI transformation" lauded by CEO Mark Zuckerberg can coincide with significant job losses for workers.
The Unseen Costs of Digital Expansion
The demand for Azure continued to exceed available capacity, even after Microsoft brought additional computing infrastructure online during the quarter. This relentless expansion of data centres and AI processing power, while driving corporate profits, also represents a significant increase in the digital infrastructure that can be leveraged by state actors.
The billions flowing into AI development, as evidenced by Microsoft's $3.2 billion unrealised gain on its investment in the AI company Anthropic, underscore a system where capital is welcomed and multiplied without borders, while the movement of people seeking survival and opportunity is increasingly criminalised and met with sophisticated technological barriers.