Microsoft sees a boost to its cloud business from artificial intelligence applications such as chatbots. Of the 30 percent growth in the Azure cloud platform, around a fifth was due to AI applications, said CFO Amy Hood.
Microsoft had made a pact with ChatGPT developer OpenAI and is integrating AI assistants into its software across the board. User interest also drives the need for the cloud infrastructure behind it.
Battle for market share in the AI business
Microsoft presented its current business figures at the same time as Google parent Alphabet – and observers on Wall Street were excited about the AI effects at both companies. Google has dominated the web search business for years. Advertising in the search results area is by far the Internet giant’s most important source of money. Google wants to improve its search engine with AI functions. Rivals like Microsoft and start-up challengers, on the other hand, are targeting the company’s search dominance and want to use AI to provide direct answers in more cases instead of a list of links.
The figures for the last quarter continued to show significant growth in Google’s advertising business – but sales fell slightly short of market expectations. Google’s advertising revenue increased by eleven percent year-on-year to 65.5 billion dollars (60.4 billion euros). Analysts on average had expected more than $65.8 billion. That was enough to cause the shares to fall by almost six percent in after-hours US trading.
Advertising around the Google search engine is still by far the group’s most important source of money. Sales here rose from $42.6 to $48 billion in the last quarter. The video subsidiary YouTube increased advertising revenue from almost 8 to 9.2 billion dollars. Overall, Alphabet sales grew by 13 percent to $86.3 billion in the last quarter and profits jumped by 52 percent to around $20.7 billion.
At Microsoft, corporate figures also rose sharply. Sales rose by almost a fifth to $62 billion in the second quarter, which ended at the end of December. Profits rose by a third to almost $22 billion. Thanks to the AI euphoria, Microsoft is currently the most valuable company in the world with a market value of more than three trillion dollars. However, analysts had also expected slightly higher cloud revenues at Microsoft. The share fell slightly by 0.33 percent in after-hours trading.
Alphabet, meanwhile, made progress on a notorious loss-maker. In the so-called “other bets” – future projects such as self-driving cars or delivery drones – sales of all companies rose from 226 to 657 million dollars. The division’s operating loss has been significantly reduced: from $1.24 billion a year ago to $863 million now. Alphabet’s robotaxi company Waymo reached a milestone of one million fully autonomous rides with passengers on board.
