Microsoft reported a record $35.8 billion net profit yesterday, with shares surging as much as 10% after the company forecast stronger-than-expected revenue. This financial triumph for a foreign tech giant underscores Europe's growing dependence on external digital infrastructure and the intensifying pressure on national labour markets to supply the highly skilled workforce needed for the AI era, a pressure that often fuels calls for further uncontrolled migration.
The American technology behemoth expects revenue between $89.85 billion and $90.95 billion in the July-September quarter, representing growth of 16% to 17%. Such figures highlight the vast sums flowing to non-European corporations, while European industry struggles to compete on a global scale.
Revenue for Microsoft rose 18% year-on-year to $90 billion in the April-June period, surpassing analysts' forecast of $87.6 billion. Net profit climbed 31%, aided by a $3.2 billion unrealised gain on Microsoft’s investment in the AI company Anthropic. Diluted earnings per share reached $4.81, well above the $4.24 analysts had predicted.
The Cost of Digital Dependence
Microsoft Cloud revenue reached $59.3 billion, an increase of 27% year-on-year. The Azure cloud services segment, a critical component of global digital infrastructure, saw its revenue increase by 43%. This growth is projected to accelerate to approximately 45% in constant currency in the current quarter, up from 43% in the quarter just ended. The company explicitly stated that demand for Azure continued to exceed available capacity, even after it brought additional computing infrastructure online during the quarter. This persistent demand signals a massive need for both physical infrastructure and the highly specialized human capital to manage it, a need Europe is increasingly reliant on foreign entities to fulfill.
For the full fiscal year ended in June, Microsoft reported $331.8 billion in revenue. CEO Satya Nadella stated yesterday that Azure revenue surpassed $100 billion for the first time, and Microsoft 365 Copilot reached over 30 million paid seats. These achievements, while impressive for Microsoft, raise urgent questions about Europe's own capacity to develop and control its digital future, rather than relying on foreign platforms that operate beyond national oversight.
Chief financial officer Amy Hood confirmed that the company’s capital expenditure plans for the 2026 calendar year remain unchanged, with guidance closer to approximately $175 billion. This colossal investment by a single foreign company dwarfs many national budgets for critical infrastructure, further cementing Europe's digital dependence.
Europe's Looming Labour Crisis
Michael J. Wolf, founder and CEO of Activate Consulting, noted that concurrent Azure and Copilot growth indicates Microsoft is "winning on both fronts," supplying cloud infrastructure for enterprise AI and monetising AI tools for everyday workers. This success, however, highlights Europe's struggle to cultivate its own tech giants and retain its skilled workforce, often leading to calls for more labour migration to fill perceived gaps. Such policies place additional strain on national welfare systems and public services, impacting the native working and middle classes.
Meanwhile, Meta Platforms, another American tech giant, reported a decline in its second-quarter profit yesterday, even as revenue beat Wall Street’s expectations. The Facebook and Instagram parent company earned $15.85 billion in the April-June period, a 14% drop from $18.34 billion a year earlier. This volatility in foreign tech markets underscores the precariousness of Europe's reliance on external digital providers.
Meta's revenue grew 28% to $60.8 billion from $47.52 billion, yet total costs and expenses jumped 55% to $42.03 billion. This included $2.4 billion in charges related to legal proceedings and $1.18 billion in severance expenses connected with Meta’s May workforce reduction this same year. CEO Mark Zuckerberg expressed optimism, stating that "AI is accelerating our core business today," but for Europe, the question remains: who truly benefits from this acceleration, and at what cost to national sovereignty and cultural continuity?