AI is an costly enterprise, costing upwards of $100 million merely to coach a brand new mannequin.
At Microsoft, although, a multi-billion greenback funding in AI seems to be paying off: CEO Satya Nadella stated on a quarterly earnings name on Wednesday that Microsoft’s AI enterprise “is on observe to surpass an annual income run fee of $10 billion subsequent quarter” and turn out to be “the quickest enterprise in our historical past to succeed in this milestone.”
The annual income run fee tasks income over a time period primarily based on earlier income.
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Microsoft has invested about $14 billion into OpenAI, the corporate behind ChatGPT. It has additionally made a number of multi-billion greenback AI commitments, together with a deal to reopen Three Mile Island, a nuclear energy plant close to Harrisburg, Pennsylvania.
Microsoft CEO Satya Nadella. Photograph by Ethan Miller/Getty Photos
Nadella additionally identified on the decision, which went over earnings for the primary quarter of fiscal 12 months 2025, that Microsoft Cloud income was up 22% 12 months over 12 months, rising to $38.9 billion for the quarter ending September 30. Income general elevated 16% to $65.6 billion.
At Microsoft, “AI-driven transformation is altering work, work artifacts, and workflow throughout each function, perform, and enterprise course of,” Nadella stated.
Although Microsoft’s earnings have been higher than anticipated, the corporate’s shares fell by greater than 5% on Thursday as a result of its predicted cloud income development was lower than anticipated.
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Nadella was well-compensated for main Microsoft: He obtained a pay enhance of over $30 million for the fiscal 12 months ending June 30, leading to an general pay of $79.1 million in comparison with $48.5 million a 12 months prior.
Nadella’s compensation would have been $5.5 million greater, however he requested for it to be decrease following a sequence of cybersecurity breaches.
In the meantime, Microsoft went via layoffs affecting practically 1,900 folks in its gaming division in January.
Microsoft now has about 228,000 workers globally.
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