Welcome to readin – the best world tech news chanel.

Microsoft reports a 33% increase in profits| GuyWhoKnowsThings

Two weeks ago, Microsoft finished off Apple as the most valuable public company. Last week, it surpassed $3 trillion in market valuation. Next week, Nadella Satya He will celebrate his 10th anniversary as CEO of the company.

For Microsoft, the pressure to remain compliant continues.

In particular, investors are looking for the company to capitalize on what they see as its leadership in artificial intelligence. It has invested billions of dollars in OpenAI, the startup behind chatbot ChatGPT, and spent the past year racing to implement its AI systems into every product it offers. Microsoft has told investors that AI won't start producing significant results until this year, but investors have been looking for early signs of how much the hype will translate into sales.

On Tuesday, Microsoft showed signs that it is finding a way, as it posted revenue and profits that surpassed Wall Street expectations.

Revenue was $62 billion in the three months ending in December, up 18 percent from a year earlier. Profits reached $21.9 billion, an increase of 33 percent.

“We've moved from talking about AI to applying it at scale,” Nadella said in a statement.

The company said it expected between $60 billion and $61 billion in sales in the current quarter, up 13 percent to 15 percent from a year ago, and higher operating income in the fiscal year, even as it invested in the construction of more data centers for cloud computing and artificial intelligence.

In the just-ended quarter, Microsoft's commercial cloud offerings overall generated $33.7 billion, an increase of 24 percent.

Its flagship cloud computing product, Azure, grew 30 percent, faster than the previous three quarters. That includes six percentage points of Azure's generative AI products, which include access Microsoft sells to AI systems developed by its partner, OpenAI.

“Azure came into play again this quarter with our advantage in AI,” Nadella said on a call with investors.

Business subscriptions to Microsoft's cloud productivity suite, including Teams, Word and Excel, rose 17 percent.

Corporate customers have only just begun testing Microsoft's Copilot offering, which integrates artificial intelligence tools into those productivity programs. Those upgrades became widely available in November and cost $30 per user per month, so even “modest” adoption of the offering can create “significant” increases in what customers pay each month, Bank of America analysts wrote in a recent note to investors.

The New York Times has sued Microsoft and OpenAI for using copyrighted material to develop artificial intelligence technologies. In an interview with “NBC Nightly News” that aired Tuesday night, Nadella said it was clear that “you can't just use copyrighted material and regurgitate it,” but added that copyright laws ” “They must now be interpreted essentially as what is a new transformation technology,” according to a transcript.

Gaming has become Microsoft's biggest consumer business, and the results included the first quarter in which game publisher Activision Blizzard was part of Microsoft. After a year and a half of regulatory reviews around the world, the company closed the $69 billion deal to buy Activision in mid-October.

The acquisition added about $2 billion to Microsoft's revenue in the quarter and accounted for about $440 million in operating losses.

Microsoft cut 1,900 jobs in its gaming division last week, largely those of employees brought in through the acquisition.

Share this article:
you may also like
Next magazine you need
most popular

what you need to know

in your inbox every morning