A good first quarter for Microsoft has meant a boost worth billions for its founder as investors rally behind the companys innovations in artificial intelligence.
On an earnings call earlier this week the Big Tech giants CEO, Satya Nadella, and his executive team revealed revenue had leapt by 7% to $52.9 billion.
Figures like a 10% increase in operating income to $22.4 billion are above analysts expectations, with the business highlighting growth in divisions like LinkedIn (where revenue is up 8%) Microsoft 365 Consumer (where subscribers grew to 65.4 million) and cloud service products like Azure (revenue growing 17%).
And on top of the figures came a focus on the topic of the moment: A.I.
The key phrase was mentioned some 50 times on the earnings call, JPMorgan counted, highlighting the businesss drive to stay ahead in the large language model race.
The company already has its foot in the door with a major disruptor in the tech sector, ChatGPT creator OpenAI. In January Fortune reported that Microsoft had invested a further $10 billion in Sam Altmans company, follow the $1 billion pledged in 2019, and another $2 billion which it quietly put into OpenAI in 2021.
Microsoft revealed a raft of new A.I. deployments. Nadella said: We have the most powerful A.I. infrastructure and its being used by our partner, OpenAI, as well as NVIDIA and leading AI start-ups like Adept and Inflection to train large models.
Our Azure OpenAI Service brings together advanced models, including ChatGPT and GPT-4 with the enterprise capabilities of Azure.
He highlighted brands like IKEA, Unilever, Mercedes-Benz and Shell were now all using various forms of Microsoft products powered by artificial intelligence.
We are focused on continuing to raise the bar on our operational excellence and performance as we innovate to help our customers maximize the value of their existing technology investments and thrive in the new era of A.I., Nadella finished.
In a few weeks times, well hold our Build conference, and we will share how we are building the most powerful A.I. platform for developers and I encourage you to tune in. I could not be more energized about the opportunities ahead.
Of course, Microsoft is not alone on its pursuit of artificial intelligence. The race to lead the pack on A.I. is fraught with competitorsand technology bigwigs who caution that its development should be slowed down.
Meta is also ramping up its efforts in A.I. with its three top executives now spending the majority of their time on artificial intelligence projects.
Amazon teased its ongoing investment into the sector earlier this year, while Google has been ironing out issues with Bard following costly inaccuracies.
Bills balance
Buoyed by Microsofts optimistic outlook, the companys stock brice soared 9% on Wednesday adding $174 billion to its market value.
The shares logged their best single-day percentage hike since November 2022 when they rose 8.2%. However, analysts pointed out that more significantly the shares reached a milestone on an absolute basis as they had previously never risen more than $19.77 in a single sessionas they did Wednesdat. They now sit at $295.37 a share.
The result of the bounce has meant that billionaire philanthropist Gateswho owns around 1% in the company with 103 million sharessaw his assets balloon by $2 billion.
The success of A.I.-backed product rollouts will be welcome news to Gates, who previously wrote in a blog the technology is one of the two innovations which have been truly revolutionary in his lifetime (the other example was the graphic user interface, or digital icons and buttons, in computing).
Gates has also rejected a proposal from the likes of Tesla CEO Elon Musk and Apple cofounder Steve Wozniak to temporarily pause the development of LLMs.
The man, worth $122 billion according to Bloombergs Billionaires Index, said halting the process in order to introduce regulation wont solve the challenges the technology poses.
