It turns out that merging AI and its cloud computing platform is a cash printing press for Microsoft, which just released its third-quarter financial results.
For the quarter, the company issued the following Q3 results compared to its year-ago financials:
• Revenue was $56.5 billion and increased 13%.
• Operating income was $26.9 billion and increased 25%.
• Net income was $22.3 billion and increased 27%.
• Diluted earnings per share was $2.99 and increased 27%.
Those are fairly eye-popping numbers and Microsoft execs are quick to give credit to its two technology powerhouses – the Microsoft Cloud and its massive AI implementation, including OpenAI’s Chat GPT.
“We’re making the age of AI real for people and businesses everywhere,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”
“Consistent execution by our sales teams and partners drove a strong start to the fiscal year with Microsoft Cloud revenue of $31.8 billion, up 24% (up 23% in constant currency) year-over-year,” added Amy Hood, executive vice president and chief financial officer of Microsoft.
Hood also notes that the company’s big investment in AI has had a direct impact on its cloud computing revenue numbers. In a conference call with analysts this week, Hood said AI was “a driving force” for the tech giant’s “3 percentage point boost” in Q3.
Aside from ChatGPT, which Forbes estimated will add $40 billion to Microsoft’s top-line numbers, the company says it’s merging OpenAI’s technology into its mainstream product catalog, expanding on its estimated $13 billion investment in OpenAI.
Microsoft’s Copilot and Gen AI operations are also generating interest among customers and even have them looking at the company in a different light.
“What AI is doing … is opening up either new conversations or extending existing conversations or getting us back in touch with customers that we maybe weren’t doing as much with,” said Brett Iversen, Microsoft vice president of investor relations in comments to Reuters.
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