Microsoft recently announced during their earnings call that they view artificial intelligence (AI) as a significant driver of future growth. Company executives revealed that with a sharp increase in demand, the annual growth rate of Azure AI, their cloud-based AI platform, has reached 30%. According to Chief Financial Officer Amy Hood, AI services contributed eight percentage points to Azure's overall growth, but the company is currently facing limitations in supply capacity and cannot fully meet market demand.
To address the growing demand, Microsoft is significantly increasing their capital expenditure. Hood stated that the company is investing half of its capital in the construction of data centers, with the other half used for the purchase of processors and graphics processors. Although the company did not disclose the specific amount of expenditure, they expect capital expenditure to further increase in the fiscal year 2025.
Microsoft CEO Satya Nadella emphasized the company's long-term investment in the AI field. He compared the current AI transformation to the previous cloud computing transformation, describing both as knowledge and capital-intensive investments. He mentioned that Microsoft's total revenue grew by 15% to $64.7 billion, and net income increased by 10% to $22 billion.
In terms of product lines, Microsoft's AI influence is also significant. Nadella mentioned that the user base of Microsoft 365's AI assistant Copilot nearly doubled in just one quarter. He stated that Copilot's customer base grew by 60% quarter-over-quarter. GitHub Copilot also performed well, becoming an important source of GitHub's revenue growth.
Additionally, Microsoft plans to further advance the AI transformation through business applications like Dynamics365. Nadella pointed out that AI will play a significant role in various fields such as marketing, finance, sales, and customer service. Despite significant investments in infrastructure, Microsoft maintains financial discipline and expects operating expenses to grow in single digits in the fiscal year 2025.
To overcome current capacity limitations, Microsoft has established partnerships with other tech companies, leveraging these partners' resources to enhance AI capabilities. Nadella stated that these collaborations are not much different from past leasing arrangements and may even be more efficient.
Key Points:
🌟 Microsoft Azure AI platform has a 30% annual growth, becoming a key driver of cloud business growth.
💡 Copilot's user base is rapidly growing, demonstrating the profound impact of AI on Microsoft products.
📈 Microsoft plans to increase capital investment to enhance infrastructure to meet future AI demands.