MSFT · 10-K · 2025A · Full report
R&D Investment in AI
MICROSOFT CORP · 2025-07-30 · Importance 68 · Surprise 58
Research and development expense for fiscal 2025 was $32,488 million, an increase of $2,978 million or 10% versus fiscal 2024. The increase was driven by investments in cloud and AI engineering and Gaming, and includes AI training and other infrastructure costs as well as third‑party development and amortization of purchased software code. R&D remained approximately 12% of revenue in fiscal 2025, consistent with the prior year, indicating continued high absolute spend to support AI and cloud product development. The company specifically calls out AI training and infrastructure as included in R&D costs for FY2025.
Key facts
- R&D expenses increased $3.0 billion or 10% year over year in fiscal year 2025 driven by investments in cloud and AI engineering and Gaming, including the Activision Blizzard acquisition.
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -1.1% | R&D expenses increased $3.0 billion or 10% year over year in fiscal year 2025 driven by investments in cloud and AI engineering and… |