Microsoft experienced a surge in sales in the final months of 2023, driven by the high demand for its artificial intelligence (AI) tools. The company reported an 18% year-on-year increase in revenue from September to December, surpassing $60 billion. This update coincided with Microsoft surpassing Apple to become the world’s most valuable publicly listed company, with a market value exceeding $3 trillion. CEO Satya Nadella highlighted Microsoft’s extensive use of AI and its application on a large scale. The quarterly results solidify Microsoft’s position as one of the leading tech companies capitalizing on the anticipated growth brought about by advancements in AI.
Microsoft’s involvement with OpenAI, the creator of the ChatGPT bot, has contributed to its success. The release of ChatGPT in 2022 generated excitement about the possibilities of this new technology. However, Microsoft and OpenAI are facing a lawsuit from the New York Times, alleging copyright infringement in training the system. The lawsuit holds both companies accountable for potential damages amounting to billions of dollars.
Microsoft has been integrating AI-assisted tools into its software and other offerings for businesses. Copilot, a program that can summarize meetings and perform various tasks like drafting emails and creating documents, was launched in November. These recent developments have proven successful for Microsoft, attracting new customers.
Investors closely monitor Microsoft’s Azure cloud computing offerings, which experienced a 30% year-on-year increase in sales, surpassing analysts’ expectations. Overall, profits for the quarter rose by 33% to $21.9 billion.
Alphabet, the parent company of Google and YouTube, also provided an update on its AI strategy. It reported a 13% year-on-year increase in revenue for the September-December quarter, with profits reaching nearly $20.7 billion compared to $13.6 billion the previous year. Alphabet CEO Sundar Pichai highlighted the benefits of AI investments on the company’s search, cloud computing, and YouTube platforms.
Despite their successes, both Microsoft and Alphabet have been reducing their workforce. Google’s headcount has decreased by approximately 5% since last year, and the company announced further job cuts this month. Microsoft also plans to downsize its gaming unit, cutting 1,900 jobs or 9% of its staff in that division. This decision follows the completion of its acquisition of Activision Blizzard, the maker of popular games such as Call of Duty and World of Warcraft.