Microsoft on Wednesday forecast disappointing growth in its cloud computing business, sending its shares down 4.5% in after-hours trading as investors worry about big spending, elusive artificial intelligence revenue and competition from cheaper AI models from China.

Microsoft CEO Nadella expects a growth rate of 175 percent with AI business alone. The current figures are solid, but the outlook is weaker.

The chief executives of Microsoft and Meta defended their hefty investments on artificial intelligence, days after Chinese upstart DeepSeek revealed a breakthrough in low-cost AI computing that shook the U.