A Michigan pension fund has filed a securities class action lawsuit against Microsoft in Seattle federal court, alleging the company concealed an Azure cloud slowdown and surging AI infrastructure costs from investors. On January 29, Microsoft shares fell ~10%, wiping out $357bn in market value after a quarterly earnings report revealed $37.5bn in capital spending (up 66% year-over-year) and Azure revenue growth decelerating from 40% to 39%, with guidance pointing to further slowdown. The plaintiffs, representing shareholders who held stock between May 2025 and January 2026, argue Microsoft knowingly withheld that it had diverted computing resources (CPUs and GPUs) from Azure to AI R&D and Copilot, constituting a material fact investors deserved to know earlier. The case names CEO Satya Nadella and CFO Amy Hood. Microsoft has not yet responded, and the allegations remain untested.
