> Compared to $40 of today, profit dropped by $40, meaning earnings contraction is around the corner...? Unless of course Microsoft manages to actually earn $20 or more from each GPU each year

Correct. If Microsoft fails to earn more profit from a capital asset, over said asset's useful life, than was paid for it, Microsoft's earnings would be reduced. Put simply, it would have made a bad investment. Presumably, that would affect whether Nvidia gets another order.

If you've ever wondered why subscription mania took hold over the last decade, you've backed into the answer.

(Note that Microsoft depreciates "servers and network equipment" on a straight-line basis over "two to six years" [1].)

[1] https://www.sec.gov/Archives/edgar/data/789019/0001193125263... page 61