Eseandre Mordi
⬤ Microsoft (MSFT) just dropped a jaw-dropping $34.9 billion in capital expenditure last quarter—a 74% jump from last year that's got everyone talking. Here's the thing: roughly half of that massive spend went straight into short-lived assets, mainly GPUs and CPUs that'll power the company's cloud and AI ambitions. It's all part of Microsoft's master plan to beef up Azure and stay ahead in the AI race.
⬤ But it gets even more interesting. Microsoft's outstanding bills for property and equipment shot up 170% quarter-over-quarter to $11.7 billion—and that's almost certainly Nvidia's (NVDA) hardware we're talking about. The numbers line up perfectly: Nvidia disclosed that one of its biggest customers (yeah, probably Microsoft) owed them $7.34 billion as of October 26, 2025. That's 22% of Nvidia's total accounts payable, matching exactly what Microsoft appears to've ordered in GPUs and CPUs.
⬤ This bill-and-hold setup works like a charm for both companies. Microsoft books the purchases as CapEx and strengthens its tech infrastructure, while Nvidia gets to recognize the revenue and keep its legendary "Beat and Raise" streak alive. Everyone wins—especially with AI and cloud demand showing zero signs of slowing down.
⬤ This whole situation shows just how intertwined the big players in AI and cloud computing really are. Microsoft's spending spree directly fuels Nvidia's growth, and their strategic partnership keeps pushing innovation forward. These financial arrangements aren't just accounting tricks—they're smart moves that benefit both companies and keep the entire sector charging ahead.
Eseandre Mordi
