Microsoft expands its cloud business and adopts a full stack AI approach. With large language models that have not only improved Azure usage and revenue growth but have also gained traction. In its Q1 2024 earnings report released on Tuesday, Microsoft stated that its cloud segment revenue increased to $31.8 billion, up 24% year over year for the three months that ended September 30.
Microsoft Expands Its Cloud Business and Adopts a Full Stack AI Approach
According to Microsoft CEO and chairman Satya Nadella, the company is relying on a full stack AI strategy, with ChatGPT, and Bing Chat. Including all of its copilot products using the same model. He stated, “We have scale leverage of one large model that is being used for inference across all of our first-party SaaS apps, as well as our API in our Azure AI Service. One large model was trained.”
Nadella added, “We are still very much in the early stages of it. Thus, we anticipate that these products will gain traction in the future.”
Revenue from Azure and other cloud services grew by 29% annually. A growth spurt that assisted in offsetting the costs associated with infrastructure buildout, according to the report. With a predicted increase in compute-intensive AI workloads, Microsoft and its hyperscale rivals AWS and Google Cloud are competing to equip their data centers with high-performance CPUs.
While infrastructure investments will continue to be a top focus for Microsoft as it advances its efforts to integrate AI throughout its tech stack, the higher quarterly growth in per user business was partially due to expanded GPU capacity.
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