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Microsoft gave extra indicators on Thursday that its hefty investments in synthetic intelligence had been starting to bear fruit, because it reported a 17 % bounce in income and a 20 % improve in revenue for the primary three months of the yr.
Revenue was $61.9 billion, up from $52.9 billion a yr earlier. Profit hit $21.9 billion, up from $18.3 billion. The outcomes beat Wall Street’s expectations.
A yr after Microsoft started its push to place A.I. into all the pieces it does, the corporate mentioned gross sales of its flagship cloud computing product, Azure, had grown 31 %. More than a fifth of that progress got here from its generative A.I. companies, which embody promoting entry to know-how developed by its associate, OpenAI.
In current quarters, Microsoft’s A.I. push has helped it achieve market share from Amazon, the main cloud companies supplier. In January, the corporate mentioned 53,000 prospects had been utilizing its cloud A.I. companies, with a 3rd of them new to Azure.
“Azure has turn out to be a port of name for just about anyone who’s doing any A.I. mission,” Satya Nadella, the chief government, mentioned in a name with buyers.
This was the primary full quarter when business prospects may get a model of Microsoft’s productiveness suite with A.I. instruments, like transcribing digital conferences in Teams or summarizing paperwork in Word. Though the corporate didn’t say what number of A.I. subscriptions — which value $30 a month — it had offered, business subscriptions grew 15 %.
Mr. Nadella mentioned quite a lot of company prospects, together with the oil large BP and the drugmaker Novo Nordisk, had purchased greater than 10,000 licenses every.
(The New York Times sued OpenAI and Microsoft in December, claiming copyright infringement of reports content material associated to their A.I. methods.)
Microsoft has dedicated $13 billion to its partnership with OpenAI, the maker of the ChatGPT chatbot, and it has been constructing new information facilities across the globe to fulfill what it anticipates shall be extra A.I. demand. The firm spent $14 billion on capital bills and leases within the first three months of the yr, up from $11.5 billion within the earlier quarter.
Amy Hood, Microsoft’s finance chief, mentioned the corporate would proceed rising capital spending and emphasised that the investments could be made to fulfill prospects’ curiosity.
“Right this minute, we do have demand that exceeds our provide by a bit,” she mentioned.
Gaming, Microsoft’s most necessary shopper product, grew 51 % to $5.5 billion, with a giant enhance from its $69 billion acquisition of Activision Blizzard, the maker of Call of Duty and different blockbuster video games, in October.
And income from Windows software program that was preinstalled on new private computer systems grew 11 %, greater than the corporate anticipated, as the marketplace for private computer systems stabilized after the pandemic.
