Microsoft’s sales accelerated in the final months of 2023. It was driven by demand for its artificial intelligence (AI) tools. The company reported that revenue in September to December increased 18% year-on-year to more than $60 billion. This update came as Microsoft became the world’s most valuable listed company. Its market value soaring past Apple this month to more than $3 trillion (£2.4 trillion).
Chief executive Satya Nadella said that Microsoft is applying AI “at scale”. The company’s results confirm Microsoft as one of the leading companies in the tech industry. Microsoft has a large stake in OpenAI, the maker of the ChatGPT bot. The chatbot launched in 2022 and sparked a wave of optimism about the new technological possibilities of AI.
However, Microsoft’s expansion into AI has not been without controversy. The New York Times is suing OpenAI over claims that its copyright was infringed to train the system. The lawsuit, which also names Microsoft as a defendant, says that the firms should be held responsible for “billions of dollars” in damages.
Microsoft has been incorporating AI-assisted tools for coding
ChatGPT and other large language models (LLMs) learn by analyzing a massive amount of data.Microsoft has been incorporating AI-assisted tools for coding and other purposes into its software. Sales of Copilot, a program that can summarize meetings held in Teams, draft emails, create word documents, and more, started in November.
Nadella said that these recent moves were paying off and “winning new customers”. Sales of Microsoft’s Azure cloud computing offerings, which are closely watched by investors. It increased 30% year-on-year, better than analysts had predicted. Overall, profits in the quarter increased 33% year-on-year to $21.9 billion.
The strategy for artificial intelligence is also a top priority at Alphabet, the owner of Google and YouTube, which also updated investors on Tuesday. Alphabet said that revenues in the September-December quarter increased 13% year-on-year and reported profits of nearly $20.7 billion, compared with $13.6 billion last year. Boss Sundar Pichai said that the company’s search, cloud computing, and YouTube businesses were also benefiting from investments in AI.
Despite the gains, both companies have continued to cut jobs. Google’s headcount is down around 5% since last year, and it announced another round of job cuts this month. Microsoft also announced plans to cut 1,900 jobs, or 9% of staff, in its gaming unit. The move followed the completion of its takeover of Activision Blizzard, maker of games Call of Duty and World of Warcraft.
