AI: Microsoft is living its iPhone moment: It’s already worth three billion dollars Business

Scott Guthrie, one of Microsoft’s most experienced programmers, was looking for an example a few weeks ago to illustrate the uproar caused by artificial intelligence products of the company, which recently crossed the three billion dollar barrier. And has overtaken Apple. The most valuable stock market company in the world. Guthrie, who leads cloud business platform Azure (cloud computing) technology giant, going back several decades. He said the high demand is similar to the high expectations caused by the launch of Windows 95, the program that promised to revolutionize home computing and whose release led to lines at the entrances to stores. Perhaps for the youngest people, who do not know what it is like to wait in line to buy an operating system, this comparison will not work, and they will better imagine what artificial intelligence (AI What does ) mean? If the context is the fury that the launch of each new mobile model made by Apple creates in consumers. And yes, Microsoft is living its iPhone moment.

The Redmond (Washington, USA)-based giant presented its second quarter results last week (it has a fiscal year that does not coincide with the calendar year and ends in June). A period when it recorded record numbers thanks to its cloud services. Between October and December, Microsoft’s turnover increased by 17% to $62.02 billion and its profit increased by 33% to $21.87 billion. “We’ve gone from talking about artificial intelligence to implementing it at scale across all layers of our offering,” said company CEO Satya Nadella during his conference call with analysts. Microsoft has been trying to sell itself to the public as an AI company for several months. For this reason, the marketing head was relieved in October after a tenure of almost a decade. The testimony was taken by Takeshi Numoto, sales manager for Azure.

Shares have risen 57% in the past year and the market capitalization stands at $3.08 trillion (more than three times the sum of all listed Spanish companies). This interest from investors is largely a response to the agreement that Microsoft has signed with OpenAI and its flagship product, ChatGPT, since 2019. The agreement between the parties was extended to “long-term” last year, in an operation that saw the firm headed by Sam Altman achieve revenues of $13 billion. Each Microsoft share is valued at $414, but analysts expect additional appreciation. Dan Ives of Wedbush Securities, an investment firm in Los Angeles, set his price target at $450, which is 8.6% above his current valuation.

Amy Hood, the company’s chief financial officer, said last week that a large part of the gains achieved by Azure were generated by the increased use of AI. The company expects this trend to continue in 2024 as more and more companies incorporate this technology. Indeed, in late January it was announced that Vodafone would invest $1.5 billion in a cloud platform to transform the digital experience of 300 million users.

However, Microsoft’s second youth also has a dark side. The technology giant is planning to lay off more than 20,000 employees in 2023, mainly comprising salespeople and members of the customer service sector. Recently, the company announced another cutback at its gaming division Microsoft Gaming, where it laid off 1,900 employees, 8% of the total. Most worked at Activision Blizzard, which was acquired the previous year.

To establish itself at the forefront of the AI ​​revolution, a position in which Microsoft is leading along with Nvidia and AMD, the company aims to attract not only large companies as customers, but also medium and small-sized corporations. To do. In this sense, last June the marketing of Copilot began, a program that uses ChatGPT4 as an engine and is targeted at small businesses. Along these lines, Microsoft launched a $20 subscription last December aimed at entrepreneurs looking to automate their companies.

“The results have been impressive,” Rajesh Jha, vice president of Experiences and Devices, said at an event hosted by Barclays last month. “68% to 72% of users agree that Copilot made them more efficient and improved the quality of their work, allowing them to focus on naturally human work: creative, reflective or collaborative… 55% More users feel more creative with AI,” Jha stressed.

Microsoft says there are 1.3 million subscribers to its GitHub Copilot service, which allows programmers to write code with the help of AI. The number of subscribers to this program has increased by 30% in the last three months. The strategy was to sell the device to larger companies at a minimum subscription of $300 per month ($30 per user) by the end of 2023. But Copilot will also be available to anyone who has Office in the cloud, and they’ll be able to use it to create content in programs like Excel, PowerPoint and Office, the company’s which has 400 million paid downloads.

One in three users of the Microsoft 365 platform claims AI makes research, writing, and summarizing tasks faster. Over the past two months, Microsoft has signed contracts with companies like Honda and Pfizer to make CoPilot available to all of their employees. The company is confident that use of the technology will become so everyday that it has made the first major revision to its keyboard in three decades, adding a key that launches the Assistant. The company’s top executive said, “In 2024, AI will be a first-class part of all computers.”

According to Nadella, Windows downloads have increased by 50% year-over-year due to AI. Yes, people are queuing up to use the latest Microsoft operating system. Unlike Windows 95, no one sees these long queues. And this is all due to the popularity of cloud and AI.

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