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During a recent earnings call with shareholders, the CEO of Microsoft, Satya Nadella, stated that artificial intelligence would eventually be included in all of the company’s applications.
After discussing Microsoft’s financial performance for the last quarter, Nadella answered questions about AI and its expected integration into more products.
Given Microsoft’s commitment to expanding its partnership with OpenAI, it makes sense that shareholders would have questions about when Microsoft plans to use the technology it’s investing in.
Although Nadella wasn’t willing to give a specific date, he stated that AI would be integrated into all of Microsoft’s applications in the future.
In this article, we’ll take a closer look at Nadella’s statements regarding AI and briefly summarize the relevant highlights from Microsoft’s earnings report.
Nadella Says Every Microsoft App Will Be An AI App
Tyler Radke, the Lead Analyst at Citi, asked Nadella about the extent to which AI will be employed throughout Microsoft Azure, which is the cloud computing platform that runs its applications.
This was Nadella’s response:
“I think it’s too early to sort of start somehow separating out AI from the rest of the workload. I mean, even the workloads themselves, AI is just going to be a core part of a workload in Azure versus just AI alone. In other words, if you have an application that’s using a bunch of inference, let’s say, it’s also going to have a bunch of storage, and it’s going to have a bunch of other compute beyond GPU inferencing, if you will. I think over time, obviously, I think every app is going to be an AI app. That’s, I think, the best way to think about this transformation.”
Nadella is saying it’s too early to separate AI into its own category because it’s becoming a core part of all products.
He believes AI will be integrated into all apps over time and will also be integrated with storage and other forms of computing beyond just GPU inferencing.
In response to a question from Keith Weiss of Morgan Stanley, Nadella expressed a similar sentiment, saying investors should expect AI to be included in everything.
“I think the way for our investors to see this is we fundamentally believe that the next big platform wave, as I said, is going to be AI. And we strongly also believe a lot of the enterprise value gets created by just being able to catch these waves, and then have those waves impact every part of our tech stack, and also create new solutions and new opportunities…
And so, we fully expect us to sort of incorporate AI in every layer of the stack, whether it’s in productivity, whether it’s in our consumer services.”
Other Highlights From Microsoft’s Earnings Call
Microsoft announced that in the last quarter of 2022, it made $52.7 billion in revenue, which is 2% more than the year before.
However, the company’s profit is down due to decreases in operating income, net income, and earnings per share.
Advertising spending declined slightly more than expected, impacting search and news advertising and LinkedIn Marketing Solutions.
One of the most notable highlights is the increase in LinkedIn revenue by 10%. This indicates the professional networking platform is performing well and that businesses can feel confident investing their time in it.
Another highlight from the report is the increase in revenue for server products and cloud services by 20%. This growth was driven by the revenue of Azure and other cloud services, which increased by 31%.
This indicates that Microsoft’s cloud services are becoming increasingly popular in the market, which bodes well for the future of the company’s partnership with OpenAI.
Despite a slight decrease in profit, the company’s overall financial performance remains strong.
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