Microsoft’s revenue has experienced a significant 18% increase after implementing artificial intelligence (AI) across its technology infrastructure. The company, along with Alphabet, the parent company of Google, recently announced their earnings for the previous quarter, highlighting advancements in AI and cloud computing. AI has been a prominent topic in the tech industry, with a global market size of $196.6 billion in 2023. Microsoft and Google have been at the forefront of AI development, with Microsoft attributing its accelerated sales at the end of the year to its AI tools.
According to the report, Microsoft’s revenue rose by 18% year-on-year from September to December, surpassing $60 billion. Satya Nadella, Microsoft’s chairman and CEO, emphasized the company’s commitment to applying AI at scale, enabling them to win new customers and drive productivity gains across various sectors. These impressive results propelled Microsoft to become the world’s most valuable public company, surpassing Apple, with a value of $3 trillion. Additionally, Microsoft’s cloud computing service, Azure, experienced a 30% year-on-year increase in sales, exceeding industry analysts’ predictions. Overall, the company’s profits for the fourth quarter were up by 33% year-on-year, reaching $21.9 billion.
In 2024, Microsoft began by launching the professional version of its AI chatbot, Copilot, which offers custom GPTs (Generative Pre-trained Transformers) and Office integration. However, the company also faced a major copyright lawsuit against The New York Times, alongside OpenAI. Alphabet, similarly, leveraged its AI integrations as a key factor in its fourth-quarter success. Sundar Pichai, the CEO of Alphabet, expressed satisfaction with Google Search’s strength and growth from YouTube and Cloud, highlighting the benefits derived from their AI investments and innovation. Alphabet reported a consolidated revenue of $86 billion for the fourth quarter, representing a 13% year-over-year increase.
Despite its achievements, Google initiated a job-cutting plan to achieve its ambitious goals in areas including AI. In January 2023, the company announced a 6% reduction in its global workforce, ultimately leading to the layoff of 182,381 employees worldwide by September 2023. However, Google also made advancements in AI by introducing Lumiere, a realistic AI text-to-video generator. This technology utilizes a time-space diffusion model to transform text and images into AI-generated videos with on-demand editing capabilities.
Overall, Microsoft and Alphabet’s robust revenue growth is largely attributed to their strategic integration of AI throughout their respective technology stacks. These developments highlight the increasing importance of AI in driving innovation and profitability in the tech industry.