Microsoft’s quarterly profits soared, the company said yesterday, as its big push into artificial intelligence seemed to be bearing fruit but growth in its key cloud computing business slowed.
The company posted US$56.2 billion in sales for the quarter, which also beat expectations.
Microsoft shares had lifted off last week when the company said it would charge US$30 extra per user to turbocharge its Microsoft 365 product ― which includes Word, Excel, and Teams ― with AI powers.
This was an extra boost to a stellar year for Microsoft, whose big gamble on AI has so far been rewarded with a share price hike of about 45 percent this year.
The heart of the company’s activity is the Azure cloud service, which competes with Amazon’s AWS and Google Cloud to offer businesses their computing needs.
Demand for cloud computing slowed after a historic surge during the pandemic, and Microsoft and its rivals hope that the extra computing demands needed for AI will revive sales.
The tech giant said Azure and other cloud services saw revenue growth of 26 percent year-over-year, down slightly from the previous quarter.
Microsoft began 2023 with an announcement that it had entered into a close relationship with OpenAI, the company behind ChatGPT.
The Redmond, Washington-based company swiftly integrated ChatGPT’s powers into its Bing search engine, breathing new life into a product that has been unable to compete with Google.
Microsoft has also pressed on with its big move to expand beyond its popular Xbox video game console by buying Activision Blizzard for US$75 billion.
The deal has faced major regulatory scrutiny over competition concerns, but after an effort by US authorities to block the deal failed in court, the move looks likely to succeed. ― AFP
