Microsoft said Wednesday that its profit for the October-December quarter grew 10% as it works to capitalize on the huge amounts of money it has spent to advance its artificial intelligence technology.
But while its overall profits and revenue beat Wall Street expectations, it slightly missed projections for its closely-watched cloud computing business, a centerpiece of its AI efforts.
The company reported net income for the quarter of $24.1 billion, or $3.23 per share, beating Wall Street expectations of $3.11 per share. The Redmond, Washington-based software maker posted revenue of $69.6 billion in the quarter, up 12% from the previous year, also beating expectations.
Analysts polled by FactSet Research expected Microsoft to generate revenue of $68.87 billion in the last three months of the year.
Sales from Microsoft’s cloud-focused business segment that includes its flagship Azure computing platform grew 19% from the same time last year to $25.5 billion, which was less than the $25.83 billion forecast by FactSet analysts.
Microsoft’s productivity business segment, which includes its Office suite of email and other workplace products, grew 14% to $29.4 billion.
Its personal computing business, led by its Windows division, remained steady at $14.7 billion, with a drop in consumer device sales offset by growth in advertising revenue tied to the Bing search engine.
Microsoft shares dropped 5% in after-hours trading Wednesday but were still higher than Monday, when the tech giant was hit by a broader tech stock sale caused by a frenzy over the new ChatGPT competitor developed by Chinese tech startup DeepSeek.
Microsoft is a close partner of ChatGPT maker OpenAI and also sells its own AI chatbot services, branded as Copilot. Part of what drove the Wall Street panic this week was concern over the startup's claims that it was catching up to U.S. tech titans on a fraction of their budget.
Microsoft CEO Satya Nadella downplayed those concerns on an investor call Wednesday, saying “DeepSeek had some real innovations” and it is good to have efficiency gains and lower prices in AI development because it “means people can consume more and there’ll be more apps written.”
Microsoft also added DeepSeek's latest AI model to those available on its Azure computing platform Wednesday.
Building and operating AI systems is costly, and Microsoft has said it plans to spend $80 billion this year as it expands its global network of energy-hungry computing centers and supplies them with specialized chips to train and run AI models.
“We have more than doubled our overall data center capacity in the last three years and we have added more capacity last year than any other year in our history,” Nadella said.
FILE - Microsoft CEO Satya Nadella speaks during the Microsoft Ignite conference, Tuesday, Nov. 19, 2024, in Chicago. (AP Photo/Charles Rex Arbogast, File)
PALO ALTO, Calif.--(BUSINESS WIRE)--Feb 18, 2025--
While businesses increasingly want to adopt AI in the workplace, a lack of adequate training remains one of the most significant barriers to success. To address this gap, You.com and Inversity today announced an exclusive multi-year partnership to deliver the first-ever personalized, role-specific training program with real-time feedback to upskill millions of knowledge workers globally.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20250218744776/en/
According to recent research from Capgemini, 65% of leaders already see AI as a potential strategic "thought partner" in planning, risk evaluation, and decision-making. However, adoption is in the early stages. Only 15% of leaders and managers and 20% of employees use AI tools daily, the study found. Training is a major gap, with 58% of leaders and managers citing the absence of formal AI training as a major challenge. Just 16% of employees said they have received adequate support to develop AI skills, and only 46% of leaders and managers have received formal AI training.
Existing workplace training often means generic modules that employees rush through just to check a box. You.com's partnership with Inversity takes a different approach by integrating AI training directly into daily work that’s tailored to the worker’s exact role and needs. For example, a Marketing Communications Manager enters their priorities - like newsletter writing and social media content. They receive personalized exercises using AI, with immediate feedback. What they learn can be immediately applied to their role.
“The future of work is about all of us becoming managers of AI,” said Richard Socher, co-founder and CEO of You.com. “Going from an individual contributor to a people manager requires learning to delegate clearly, building trust, and specifying requirements. That's exactly the skill transition we’ll all need. When you work with You.com, you'll be able to uplevel yourself and your entire team into AI managers thanks to our new partnership with Inversity.”
"This partnership with you.com represents an exciting step in realizing our vision: equipping millions of people with the skills to harness AI effectively. By combining You.com's powerful AI offering with Inversity's deeply personalized and certified AI training, we'll help people reimagine the way they work with AI and do their best work faster," said James Kuht, founder and CEO of Inversity.
Unlike existing one-size-fits-all training programs, this partnership offers:
The program is structured in three tiers that progressively build AI capabilities:
To get started, visit You.com.
About You.com
You.com provides accurate answers to complex questions and automates workflows to make you more productive. You.com AI Agents maximize the productivity of knowledge workers through fast and accurate research and analysis, complex problem solving, content creation, and more. The company’s suite of APIs and end-to-end solutions drive revenue for businesses by becoming the foundation AI agent layer for their products and services. Founded by leading AI research scientists Richard Socher and Bryan McCann, you.com has raised $99 million from Marc Benioff’s Time Ventures, Salesforce Ventures, NVIDIA, SBVA, Georgian Ventures, Radical Ventures, Day One Ventures, Breyer Capital, Norwest Venture Partners, DuckDuckGo and others.
About Inversity
Inversity is an applied AI skills training provider that helps professionals seamlessly integrate AI into their daily workflows, enhancing productivity and creativity. Their unique AI-powered, role-specific training delivers hands-on exercises with immediate feedback, bridging the gap between theory and real-world application— ensuring that once you start using AI effectively, you’ll never go back to working without it. Inversity’s programs don’t just teach AI; they certify professionals in its use, helping them stand out in a rapidly evolving job market. Founded by a team with deep expertise in AI adoption - including CEO Dr. James Kuht MBE, who previously led AI training for government leaders and executives - Inversity delivers training that is as practical as it is transformative.
(Graphic: Business Wire)