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Microsoft's slow cloud growth signals AI payoff will take longer

Economic Times

Economic Times · 1y ago

Microsoft's slow cloud growth signals AI payoff will take longer

Microsoft plans to increase spending on AI infrastructure despite slower growth in its cloud business, causing shares to fall. The company expects Azure cloud growth to accelerate in the second half of fiscal 2025. Microsoft's capital spending rose 77.6% to $19 billion in Q4 2024, with most of it invested in cloud and AI-related areas. While Azure growth slowed, AI services saw an increase in revenue. Microsoft CEO Satya Nadella stated that Azure AI is used by over 60,000 customers, and the average spend per customer continues to rise. Despite disappointment in Azure growth, Microsoft's overall revenue rose 15% to $64.7 billion in Q4.

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Microsoft's AI demand under scrutiny as investors seek payday

Economic Times

Economic Times · 9m ago

Microsoft's AI demand under scrutiny as investors seek payday

Microsoft is projected to report its slowest quarterly revenue growth in a year as investors seek signs of artificial intelligence (AI) demand and worry about the return on investment in the technology. Although seen as a frontrunner in generative AI, Microsoft's key products, including its enterprise assistant Copilot, have experienced slow adoption. Concerns over capital expenditures, margin compression, lack of evidence on AI returns, and financial resegmentation have added to apprehension around Microsoft's earnings. Microsoft's stock performance has also underperformed the S&P 500. Azure cloud computing is expected to have grown by 33%, while overall revenue is expected to increase by 14.1%.

Microsoft to invest 4.3 billion euros in Italy for AI infrastructure and cloud capacity

Economic Times

Economic Times · 10m ago

Microsoft to invest 4.3 billion euros in Italy for AI infrastructure and cloud capacity

- Microsoft to invest 4.3 billion euros ($4.75 billion) in Italy for AI infrastructure and cloud capacity - The investment will be spread over the next two years - Microsoft's biggest investment in Italy so far - Aims to strengthen AI capabilities and cloud services in the country - Reflects Microsoft's commitment to Italy's technological growth and innovation

Microsoft partners with OpenAI's French rival Mistral

Economic Times

Economic Times · 1y ago

Microsoft partners with OpenAI's French rival Mistral

Microsoft and French startup Mistral AI have entered into a partnership to make Mistral AI's AI models available on Microsoft's Azure cloud platform. The deal signifies Microsoft's efforts to expand its offerings in the AI space and attract more customers to Azure. As part of the collaboration, Microsoft will also take a minority stake in Mistral AI. Mistral AI, based in Paris, focuses on developing open source and proprietary large language models (LLMs) similar to OpenAI's ChatGPT. Azure customers will have access to Mistral's AI models, with plans to expand to other cloud platforms in the future.

Microsoft approves new $60 billion share buyback program, quarterly dividend of $0.83 — a 10% jump | Mint

Livemint

Livemint · 10m ago

Microsoft approves new $60 billion share buyback program, quarterly dividend of $0.83 — a 10% jump | Mint

Microsoft has announced a new share buyback program of up to $60 billion, approved by its board. The company reported a quarterly dividend of $0.83 per share, marking an 8 cent increase from the previous quarter. Microsoft's annual shareholders meeting will take place on December 10. The tech giant has been increasing spending on AI infrastructure, resulting in a rise in capital spending. Despite a slowdown in growth in its Azure cloud business, Microsoft expects growth to accelerate in the second half of fiscal 2025.

Microsoft results disappoint investors wanting more from AI

Economic Times

Economic Times · 6m ago

Microsoft results disappoint investors wanting more from AI

Microsoft's Azure cloud business growth disappointed investors despite beating revenue estimates due to high AI expenses and competition from low-cost Chinese AI technologies. The stock dropped by 2% as Microsoft struggles to demonstrate returns on substantial AI investments. Azure's revenue growth fell short of expectations, exacerbated by a rising Chinese AI model, DeepSeek. Microsoft's shares gained 8% over the year but lagged behind rivals like Alphabet and Amazon. Despite this, Microsoft's AI capabilities continue to lure investors.

Microsoft shares slide 5% as cloud forecast, AI spending disappoint

Economic Times

Economic Times · 6m ago

Microsoft shares slide 5% as cloud forecast, AI spending disappoint

Microsoft's cloud computing business forecast fell short of expectations, causing its shares to drop by 4.5%. Despite beating quarterly sales estimates, concerns linger over high spending in AI and competition from cheaper Chinese models. Azure's growth projections are below expectations, with revenue growth missing estimates. Microsoft's capital expenditures exceeded expectations, and the rise of Chinese AI models like DeepSeek has heightened price war fears. Investors seek assurance on the monetization of significant AI investments.

Microsoft to invest $1.5 bln in Emirati AI firm G42, New York Times reports

Reuters · 1y ago

Microsoft to invest $1.5 bln in Emirati AI firm G42, New York Times reports

Microsoft plans to invest $1.5 billion in G42, an AI firm in the UAE, according to the New York Times. The partnership will involve G42 using Microsoft's cloud services and adhering to a security arrangement negotiated with the US government. This move comes as G42 divests from Chinese investments and removes Chinese hardware from its operations. The agreement also includes protections for AI products and Microsoft President, Brad Smith, will take a seat on G42's board. Neither Microsoft nor G42 have commented on the investment.

Microsoft's AI edge under scrutiny as OpenAI turns to rivals for cloud services - The Economic Times

Economic Times

Economic Times · 12d ago

Microsoft's AI edge under scrutiny as OpenAI turns to rivals for cloud services - The Economic Times

Microsoft's AI edge is under scrutiny as OpenAI considers rivals Google, Oracle, and CoreWeave for cloud services, despite exclusive licensing deals bolstering Microsoft's Azure cloud business. OpenAI's potential public listing and renegotiation of its partnership with Microsoft could impact their stake in ChatGPT technology. While Microsoft's stock shows confidence, investor opinions on the partnership are divided, with Microsoft's AI capacity and expenditure under focus amidst rising competition and evolving market dynamics.

Vodafone signs $1.5 billion Microsoft deal for AI, cloud and IoT

Economic Times

Economic Times · 1y ago

Vodafone signs $1.5 billion Microsoft deal for AI, cloud and IoT

Vodafone has signed a $1.5 billion deal with Microsoft for AI, cloud, and IoT services. The partnership aims to accelerate digital transformation, enhance customer experience, and improve operational efficiency. Vodafone will also benefit from Microsoft's expertise in data analytics and AI to develop new innovative services for its customers. This deal demonstrates the growing importance of technology partnerships in driving innovation and growth in the telecom industry.

Elon Musk, who's suing Microsoft, is also software giant's special guest in new Grok AI partnership

Economic Times

Economic Times · 2m ago

Elon Musk, who's suing Microsoft, is also software giant's special guest in new Grok AI partnership

Elon Musk, engaged in a legal dispute with Microsoft, appeared at their tech showcase to announce his AI chatbot, Grok, will be hosted on Microsoft's Azure cloud. Despite a recent controversy involving Grok's comments, Musk emphasized the importance of honesty in AI. Meanwhile, Microsoft's event was disrupted by protests over their AI services' role in Gaza. Additionally, Microsoft-owned GitHub introduced a new AI coding agent amidst recent company layoffs.

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