Analyst: Microsoft's AI development will put pressure on the recent growth of Azure.

Analysts at TD Cowen wrote in a report that Microsoft is developing its own cutting-edge AI model, with a target release date in 2027, which will require a significant amount of computing power and may limit the growth prospects of the company's Azure business. They pointed out that Microsoft's Chief Financial Officer has already indicated that computing resources will be prioritized for internal research and development, and that this shift may already be reflected in Microsoft's expectations for the current quarter. The analysts wrote: "We do believe that this will limit upside potential as well as the ability for Azure growth to accelerate." They predict that once the computing power needed to train the new model begins to decrease, computing resources may be reallocated to Azure around mid-2027.