Microsoft was sued in Seattle federal court on June 12 by shareholders led by the City of St. Clair Shores Police and Fire Retirement System in Michigan.

The investors alleged that Microsoft concealed slowing growth in Azure and other cloud services, as well as rising AI infrastructure costs.

They pointed to the company’s January 28 results, which showed Azure and related cloud revenue growth slowed to 39% in the December quarter from 40% a quarter earlier, while capital spending reached US$37.5 billion.

Microsoft shares fell 10% on January 29, wiping out about US$357 billion in market value in the company’s biggest one-day decline in nearly six years.

A complaint summary said the proposed class covers investors who bought Microsoft shares from May 1, 2025, to January 28, 2026.

The lawsuit alleged that Microsoft failed to disclose product, competition, and adoption challenges related to Copilot.

It also claimed the company diverted CPU and GPU capacity away from Azure and had sold only 15 million paid Microsoft 365 Copilot seats.

Microsoft said the claims were without merit. The suit also names CEO Satya Nadella and CFO Amy Hood.

Microsoft had already signaled a large expansion, saying Azure generated US$75 billion in fiscal 2025 revenue and that additions to property and equipment rose by US$20.1 billion, mainly for datacenters.

🔗 Source: Reuters

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