Microsoft's AI business annualized revenue surpasses $37 billion; Azure grows 40%

Microsoft reported strong fiscal Q3 results, with revenue up 18% and net income up 23%.

AI revenue topped a $37 billion annual run rate, while Azure and other cloud services grew 40%.

The company sharply increased capital spending to expand infrastructure and keep up with demand.

The results underline continued rapid growth in Microsoft’s AI and cloud businesses.