microsoft the garage


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Satya Nadella is probably having a blast right now.

Just one quarter in from the start of the year, and only a handful of months since OpenAI’s spectacular success with ChatGPT, artificial intelligence is already turning Microsoft’s fortunes around (not that the company wasn’t wildly successful already).

The Redmond, Wash.-based company gave investors a first look this past week at how well AI is helping push up its bottom line, and boy it did not disappoint. The Windows maker said it generated $52.9 billion in revenue during the first three months of the year, a cool $3.5 billion more than it had generated in the same quarter of 2022, while net income was up by an extra $1.5 billion year over year to $18.3 billion.

And it was all thanks to AI.

The timing couldn’t have been better, since experts believed Microsoft would go through a downturn as a result of declining Windows OS sales due to sagging PC sales. But CEO Nadella was like, hell naw.

Soon after realizing the potential of OpenAI’s GPT, the company knew it had lightning in a bottle and quickly began rolling out GPT capabilities across a suite of its products, including Azure, Dynamics 365, and even Bing!

In fact, Nadella came loaded with examples of customers using its AI-powered suite of tools during the company’s earnings call discussing Microsoft’s financial results. The Microsoft CEO casually name dropped tech mainstays Nvidia, Snap, and Shopify, but then also disclosed the likes of Mercedes-Benz, Shell, and Unilever — indicating that businesses from a wide variety of industries were harnessing the power of AI to streamline their workflows and improve efficiency.

No wonder then that Microsoft’s stock reversed a declining trend in its price and crossed the $300/share threshold after the earnings release. The last time the company’s stock price was hovering over $300/share was in 2021.

Source: HackerNoon
Source: HackerNoon

Moving forward, Nadella said Microsoft would focus on three priorities (emphasis ours):

“First, helping customers use the breadth and depth of the Microsoft Cloud to get the most value out of their digital spend. Second, investing to lead in the new AI wave across our solution areas, and expanding our [total addressable market]. And, third, driving operating leverage, aligning our cost structure with our revenue growth.

While AI isn’t what Microsoft is traditionally known for, there really isn’t anything the company won’t touch with this technology. That’s why it was quick to swoop in with a $10 billion investment in ChatGPT creator OpenAI, causing competitor Google to panic.

Well, how did Google fare financially over the same period? Not so bad, apparently!

Google-parent Alphabet saw a modest uptick of $1.8 billion in revenue year over year to $69.8 billion during the quarter ended March, though profit was down $1.4 billion year over year to $15.1 billion. The results were better than expected though, and was accompanied by news that the company would buy back $70 billion worth of shares (always a plus for investors!).

Nonetheless, Google is nowhere near as prominent as Microsoft in the AI ecosystem, and if the New York Times is to be believed, Samsung phones may soon begin shipping out with ChatGPT-powered Bing instead of Google as the default search engine. We’re sure that’s going to sit well with Alphabet CEO Sundar Pichai’s dissidents.

For this week, Microsoft ranked #75 on HackerNoon’s Tech Company Rankings, while Google was trending on the #4 spot.

In Other News.. ?

  • Microsoft is still vying for Activision-Blizzard despite facing a setback in the UK.
  • Geoffrey Hinton, the ‘Godfather of AI’, recently quit Google to speak about the dangers of artificial intelligence.
  • Mastercard will expand its cryptocurrency payment card programme by seeking more partnerships with crypto firms, Reuters reported.
  • The European Union is likely to reach a political agreement this year that will pave the way for the world’s first major artificial intelligence law.

And that’s a wrap! Don’t forget to share this newsletter with your family and friends! See y’all next week. PEACE! ??

— Sheharyar Khan, Editor, Business Tech @ HackerNoon

Featured image generated using Kadinsky 2 with the following prompt: “microsoft, CEO Satya Nadella, counting dollars, in his office”

This article was originally published by Sheharyar Khan on Hackernoon.


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