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Microsoft results show benefits of AI on Azure

February 1, 2024
in Technology
Microsoft results show benefits of AI on Azure
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Sashkin – stock.adobe.com

The company’s cloud business posted revenue of $33bn, with new AI inferencing workloads driving up demand

Cliff Saran

By

Cliff Saran,
Managing Editor

Published: 31 Jan 2024 12:00

Microsoft’s earnings for 2024 show significant growth in the company’s cloud offerings, with revenue in its Intelligent Cloud business increasing 20% to $25.9bn.

CEO Satya Nadella said the financial performance of the company was driven by the continued strength of Microsoft Cloud, which, he said, surpassed $33bn in revenue, up 24%. “We’ve moved from talking about AI [artificial intelligence] to applying AI at scale,” he said. “By infusing AI across every layer of our tech stack, we’re winning new customers and helping drive new benefits and productivity gains.”

Its AI services also helped the company drive growth in large, long-term Azure contracts. Nadella said Microsoft now has 53,000 Azure AI customers. “Over one-third are new to Azure over the past 12 months,” he added.

Nadella said research from Microsoft, as well as external studies, have shown businesses are able to achieve as much as a 70% improvement in productivity using generative AI (GenAI) for specific work tasks. “Early Copilot for Microsoft 365 users were 29% faster in a series of tasks like searching, writing and summarising,” he revealed.

Overall, Microsoft reported revenue of $62bn, an increase of 18% for the quarter that ended 31 December 2023. Office Commercial products and cloud services revenue increased 15%, LinkedIn revenue increased 9%, and Dynamics products and cloud services revenue increased 21%.

Nadella predicted that 2024 will be the year AI is embedded in PCs. “Windows PCs with built-in neural processing units were front and centre at the Consumer Electronics Show, unlocking new AI experiences to make what you do on your PC easier and faster – from searching for answers and summarising emails, to optimising performance and battery efficiency,” he said.

Chief financial officer Amy Hood said: “Growth will be driven by our Azure consumption business with continued strong contribution from AI. Our per-user business should see benefit from Microsoft 365 suite momentum, though we expect continued moderation in seat growth rates given the size of the installed base.”

When asked about Azure AI’s growth, Hood described the situation as “the application of AI at scale”.

“We want to be able to show people this is how that’s going to look,” she said. “It’s inferencing workloads. Where people are expecting productivity gains, other benefits that grow revenue.”

Nadella said most of the AI workloads were inference-based, rather than training AI models. When asked about the impact of GenAI on the tech stack, he said: “It is going to have a very, very foundational impact.

“In fact, you could say the core compute architecture itself changes,” Nadella continued. “Everything from power, power density to the datacentre design to what used to be the accelerator now is sort of the main CPU, so to speak, or the main compute unit … The core computer architecture changes. I think every workload changes.”

Given that the growth of AI workloads on Microsoft Cloud has driven up investment in IT infrastructure, this has been offset by improvements in Azure and Office 365, according to Hood.

“The tech stack we’re building, no matter what team it’s on, is inclusive of AI enablement,” she said. “And so, think about it as building that consistency without needing to add a lot of resources to do that.

“It’s been a real pivot of our entire investment infrastructure to be working on this work,” said Hood. “And I think that’s important, because it means you’re shifting to an AI-first position, not just in the language we use, but in what people are working on, day to day. That does, obviously, create a leverage opportunity.”

Read more on Artificial intelligence, automation and robotics


Copilots, AI and Azure drive Microsoft revenue growth

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Artificial intelligence puts Microsoft Azure in top gear

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Microsoft bets on AI to drive next wave of cloud, revenues

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Microsoft Cloud grows, but less than expected

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>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Computer Weekly – https://www.computerweekly.com/news/366568432/Microsoft-results-show-benefits-of-AI-on-Azure

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