Microsoft has spent years telling investors how fast Azure grew without ever saying how much money it actually made. That changed on Wednesday, when the company reported Azure brought in $33.2 billion for the July-September quarter, up 48% from a year earlier.
It's a small disclosure with a big effect. Amazon and Alphabet already break out cloud revenue in dollars every quarter, which made Azure the odd one out whenever analysts tried to size up the three companies against each other. Now they can compare directly, and the first comparison is not bad for Microsoft. Alphabet, which also reported Wednesday, said Google Cloud brought in $30.7 billion over the same three months, putting Azure slightly ahead on raw dollars even though Google Cloud roughly doubled its revenue year over year, about twice Azure's growth rate.
Azure's $33.2 billion beat analyst expectations of roughly $32.3 billion by about $850 million, and its 48% growth rate ran ahead of the 44% to 45% that chief financial officer Amy Hood had forecast back in July. The business is now Microsoft's largest and fastest-growing, making up about 36% of the company's $92.3 billion in total quarterly revenue.
A new segment, and OpenAI's cut
Microsoft also restructured how it reports its business this quarter, folding Azure and Microsoft 365's cloud operations into a new segment called Agents and Infra, replacing the old three-way split of Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. That combined segment pulled in $76.8 billion, up 25% from last year.
Buried in the same filing was a separate number that says a lot about how tangled Microsoft and OpenAI remain even as they compete for some of the same customers. Microsoft recorded $10 billion in revenue from its commercial arrangements with OpenAI in the quarter, nearly 11% of its total sales. For the full 2026 fiscal year, OpenAI-related revenue hit $24.1 billion, and at the latest quarterly pace, that works out to roughly $40 billion a year.
Microsoft also disclosed $7.2 billion in outstanding receivables from OpenAI, money the startup still owes on earlier transactions, up from $6 billion in June. OpenAI reportedly shares 20% of its revenue with Microsoft under the terms of Microsoft's more than $13 billion investment, though neither company has confirmed that figure publicly. Under an April 2026 agreement, OpenAI must keep sharing revenue through 2030, subject to a cap, even as it's now free to buy cloud computing from Microsoft's rivals.
That freedom came at a price. As part of an October 2025 deal that loosened the companies' once-exclusive arrangement, OpenAI committed to buying an additional $250 billion in Azure services. Microsoft's ownership stake in OpenAI has drifted down through all of this, from about 27% right after that recapitalization to 25% in June and 24% in September, with Microsoft not saying what's driving the dilution.
Amazon reports its own earnings on Thursday, and Amazon Web Services is still the biggest cloud business around. Nobody expects Microsoft to overtake it yet. But with all three companies now putting real dollar figures on the table every quarter, the comparisons are only going to get sharper.
TBFiled by The Tech Business Desk
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