Microsoft Charts an In-House AI Path to Autonomy Amid Heavy Infrastructure Spend

• Microsoft will increasingly design and deploy its own top-tier AI models
• Dependence on OpenAI to be reduced despite an investment exceeding $13 billion
• Capital expenditures of $37.5 billion in the second quarter weigh on sentiment
• The shares remain well below the 52-week high of $555

Path to Independence

On Thursday, Mustafa Suleyman, head of Microsoft AI, publicly outlined the strategic pivot. Microsoft now aims for genuine autonomy in AI development, with the new in-house models expected to be available in 2026. This move positions the company to compete in the enterprise market with what it calls professional AGI (Artificial General Intelligence).

This reorientation follows the October 2025 restructuring of the OpenAI partnership. After investing more than $13 billion, Microsoft holds roughly 27 percent of OpenAI. Suleyman also offered a notable forecast: within 12 to 18 months, AI could reach a level capable of automating the majority of office tasks.

Infrastructure Costs in Focus

Should investors sell immediately? Or is it worth buying Microsoft?

The stock closed down 0.6 percent at $401.79 on Thursday, reflecting investor worries about the scale of the infrastructure outlays. In the second quarter of fiscal year 2026, Microsoft reported capital expenditures of $37.5 billion, largely directed toward AI hardware and data centers.

The debate over amortizing these investments extends beyond Microsoft. Other tech giants, including Amazon and Alphabet, face similar questions as markets watch for visible, tangible returns from these massive spendings.

Analysts Remain Optimistic

Despite near-term headwinds, most analysts have a constructive view. The average price target sits around $600—a roughly 50 percent upside from current levels. The prevailing consensus remains a Buy or Strong Buy rating.

The critical question now is how effectively Microsoft monetizes its AI push. The company must demonstrate that its extensive infrastructure expansion benefits both the OpenAI partnership and its own model development on an economical basis. The coming quarters will reveal whether the strategic shift yields the anticipated results.