Microsoft Corp. MSFT announced in its first-quarter earnings call that its artificial intelligence business is on track to exceed $10 billion in annual revenue run rate in the next quarter, making it the fastest-growing business line in the company’s history. I did.
What happened: CEO Satya Nadella highlighted the rapid adoption of AI across the company’s product portfolio, highlighting strong customer demand and widespread enterprise adoption.
“AI-driven transformation is transforming jobs, deliverables and workflows across every role, function and business process, helping our customers drive new growth and operating leverage,” Nadella said on the earnings call. Ta.
“Our AI business is on track to exceed a $10 billion annual revenue run rate next quarter, making it the fastest business in our history to reach this milestone,” Nadella said. Ta.
Key developments driving the growth of AI include:
Almost 70% of Fortune 500 companies now use Microsoft 365 Copilot Usage of Azure OpenAI services has more than doubled in the past 6 months GitHub Copilot enterprise customers have grown 55% sequentially
CFO Amy Hood emphasized the strategic importance of AI investments, saying, “In just two and a half years, our AI business is on track to exceed a $10 billion annual revenue run rate in the second quarter. This will be the fastest business in our history to reach this milestone.”
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Why it matters: The company’s Azure cloud services posted 33% growth, and AI services contributed about 12 points to that growth. However, Microsoft acknowledged that demand continues to exceed available capacity and investment in infrastructure is increasing.
The rapid growth in AI revenue comes as Microsoft reported first-quarter overall revenue of $65.6 billion, up 16% year-over-year, while Microsoft Cloud revenue rose to $38.9 billion, representing 22% growth. Reached.
Price Action: Microsoft stock rose 0.13% on Wednesday to close at $432.53. Shares fell 3.71% in after-hours trading. Microsoft stock has risen an impressive 16.63% since the beginning of the year, according to data from Benzinga Pro.
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