Microsoft Battles Investor Lawsuit and Builds a $7 Billion Power Plant as AI Costs Soar
23.06.2026 - 10:52:54 | boerse-global.de
Microsoft’s artificial intelligence revolution is playing out on two fronts: in the courtroom and on a dusty patch of West Texas. The software giant is simultaneously defending itself against a class-action lawsuit over its Copilot rollout while forging ahead with a massive energy project to fuel the data centers that power its AI ambitions.
The partnership with Chevron, code-named “Project Kilby,” will build a 2.67-gigawatt gas-fired power plant in West Texas dedicated exclusively to a new Microsoft data center. Slated to come online in 2028, the facility will draw natural gas from the Permian Basin, freeing the tech company from reliance on the regional grid. Chevron has until the end of 2026 to greenlight the project, which carries an estimated price tag of roughly $7 billion.
The energy hunger behind Project Kilby reflects the explosive growth of Microsoft’s AI business. Revenue from the division has surged to an annualized rate of more than $37 billion, a 123% jump. But that growth comes at a staggering cost. In the fiscal third quarter alone, capital expenditures ate up nearly $31 billion, and management has penciled in total capex of $190 billion for the full year, driven in part by soaring prices for the graphics processors essential to AI workloads.
Yet even as Microsoft pours cash into infrastructure, a separate legal battle threatens to cloud the narrative. Law firm Levi & Korsinsky has reminded investors that August 11, 2026, is the deadline for shareholders to step forward as lead plaintiffs in a class action filed in Seattle. The suit accuses Microsoft and four executives of concealing technical problems with the Copilot software, forcing the company to divert costly computing power from the Azure cloud platform to fix the issues. Microsoft has dismissed the allegations, insisting its public statements were accurate.
Should investors sell immediately? Or is it worth buying Microsoft?
The unrest stems partly from the January quarterly report, which revealed infrastructure investments of $37.5 billion alongside a slight deceleration in Azure growth to 39%. Management warned of a further dip in the following quarter. Those numbers have left investors questioning whether the AI splurge will deliver reliable profits anytime soon.
Shareholders have made their displeasure clear. The stock recently traded at €321.70, down roughly 20% since the start of the year and far from the October record of €478.10. After Monday’s close at €321.45, the relative strength index stood at 33, a level that suggests oversold conditions, while the shares were more than 9% below their 50-day moving average.
Beyond AI and litigation, Microsoft faces other headwinds. The Xbox division is undergoing a painful restructuring under the “Project Helix” hardware refresh, which will include layoffs. Failed negotiations with Oracle over server capacity caused a temporary crunch, and the company is now exploring an integration with Chinese AI startup DeepSeek to reduce its dependence on OpenAI. By hedging its bets across multiple models, management hopes to amortize the enormous infrastructure costs more quickly.
Microsoft at a turning point? This analysis reveals what investors need to know now.
As the August 2026 court date approaches, Microsoft will need to show that its AI investments are not just vast but also viable. The Chevron deal buys energy stability, but it does not buy time. For the market, the clock is already ticking.
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