Investors grow concerned that AI expenses and a looming price war in cloud services could blow up its profits.

Microsoft reported second-quarter earnings and revenue that beat Wall Street estimates on Wednesday. The stock, however, was dropping. The company reported earnings of $3.23 a share on revenue of $69.

Microsoft confirmed it will bring the DeepSeek R1 model to Azure cloud and GitHub in a move that it hopes will lessen its reliance on OpenAI's models.

Microsoft has brought one of DeepSeek's models to its cloud, and says that 'distilled' versions of the model will come to Copilot+ PCs soon.

Microsoft Corporation (MSFT) launched the highly popular DeepSeek R1, a powerful AI model, on its Azure cloud platform GitHub for developers.

On Jan. 30, Microsoft showed off the latest Surface for Business Copilot+ PCs, Surface Laptop 7 and Surface Pro 11. Both will be on store shelves Feb. 18. Just a day earlier, the company announced all users of the Microsoft Copilot AI assistant will be able to toggle on OpenAI’s o1 model for slower, more “thoughtful” responses.

Microsoft said its cloud-computing business will continue to grow slowly in the current quarter as the company struggles to build enough data centers to handle demand for its artificial intelligence products.

Microsoft reported slower-than-expected growth in its crucial Azure cloud business on Wednesday despite beating estimates for overall quarterly revenue and increasing use of its cloud services for artificial intelligence.

Microsoft reported that its flagship cloud computing business experienced a slowdown in growth amid constraints on data center supply.