Microsoft sales soar in AI arms race against Google

Satya Nadella, Microsoft CEO, said the company is “making the age of artificial intelligence real.” Photo: JASON REDMOND/AFP via Getty Images

Microsoft's sales rose as the tech giant cashes in on the artificial intelligence (AI) gold rush in a race with Silicon Valley rival Google.

Microsoft's first-quarter revenue jumped by 13%. to $56.5bn (£46.5bn) as chief Satya Nadella said the company was «making the age of artificial intelligence real».

The tech company has invested in ChatGPT developer OpenAI and launched a series of apps on based on artificial intelligence. tools for its Office and Word products in recent months.

Sales in the cloud internet unit, which powers artificial intelligence efforts, rose 24%. The tech giant's profits rose 27% to $22.3 billion in the three months ended September.

For rival Google, which is also trying to capitalize on rising demand for artificial intelligence technology, the picture was more mixed.< /p>

Revenue grew 11% to $76.7 billion with net profit of $19.7 billion amid the recovery of the digital industry. advertising revenue.

But the closely watched cloud division, which houses its data storage business and many of its artificial intelligence efforts, fell short of Wall Street's expectations.

Microsoft shares rose 5% after trading for an hour, while shares Alphabet, Google's parent company, fell 6%.

Sundar Pichai, Alphabet's chief executive, said the company is focused on «making artificial intelligence more useful for everyone.»

Both Google and Microsoft are rapidly adding artificial intelligence technology to their products as customers look to adopt the new technology. .

The results of Microsoft and Google are collectively valued at more than $4 trillion. Investors will view them as an indicator of the health of the US tech sector and the readiness for further spending on artificial intelligence.

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Technology results outpaced those of Facebook owner Meta on Wednesday and Amazon on Thursday.

Earlier this year, Microsoft announced a major deal with OpenAI, reportedly investing up to $10 billion in the fledgling tech company.

As part of the deal, Microsoft is embedding OpenAI's chatbot technology that can provide human-like responses to questions asked in plain English in many of its products, including the Bing search engine.

While the company's cloud divisions have traditionally focused on storing and managing data, they are increasingly using them to sell artificial intelligence tools to customers.

Google, meanwhile, is rapidly adding new AI tools to its Internet offering. -Google Cloud infrastructure, launched a chatbot called Bard and added a host of artificial intelligence photography tools to its Pixel smartphones.

Both companies have shed thousands of jobs this year as the tech sector cuts costs , aiming to improve profitability.