Microsoft sales jump in AI arms race against Google

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Microsoft sales jump in AI arms race against Google

By Matthew Field

Sales at Microsoft have surged as the technology giant cashes in on the artificial intelligence (AI) gold rush in a race against Silicon Valley rival Google.

Revenues at Microsoft jumped 13 per cent to $US56.5 billion ($88.9 billion) as boss Satya Nadella claimed the company was “making the age of AI real”.

The technology company has invested in ChatGPT-developer OpenAI and launched a series of AI-powered tools for its Office and Word products in recent months.

“Making the age of AI real”: Microsoft boss Satya Nadella.

“Making the age of AI real”: Microsoft boss Satya Nadella.Credit: Bloomberg

Sales at its cloud internet arm, which underpin the artificial intelligence efforts, were up 24 per cent. Profits at the tech giant climbed 27 per cent to $US22.3 billion in the three months through September.

It was a more mixed picture for rival Google, which is also seeking to capitalise on surging demand for AI technology.

Revenues climbed 11 per cent to $US76.7 billion with net income of $US19.7 billion on the back of a recovery in digital advertising revenues.


However, its closely watched cloud division, which houses its data storage business and many of its AI efforts, missed Wall Street expectations.

Shares in Microsoft climbed 5 per cent in after hours trading, while shares in Alphabet, Google’s parent company, fell 6 per cent.


Sundar Pichai, Alphabet chief executive, said the company was focused on “making AI more helpful for everyone”.

Both Google and Microsoft have been rapidly adding AI technology to their products as customers race to adopt the new technology.

Bellwether for US tech giants

Collectively worth more than $US4 trillion, the results for Microsoft and Google will be seen by investors as a bellwether for the state of the US technology sector and the appetite for further spending on artificial intelligence.

The tech results come ahead of results from Facebook-owner Meta and Amazon later this week.

Earlier this year, Microsoft announced a major deal with OpenAI, which will reportedly see it invest up to $US10 billion in the fledgling technology company.

As part of the deal, Microsoft has been embedding OpenAI’s chatbot technology, which can provide human-like responses to questions asked in plain English, into its many of its products including search engine Bing.


While the company’s cloud divisions have traditionally been focused on data storage and management, increasingly they are using them to sell AI tools to customers.

Google, meanwhile, has been rapidly adding new AI tools to its Google Cloud internet infrastructure offering, while it has also launched a chatbot called Bard and added a host of AI photography tools to its Pixel smartphones.

So far this year, both companies have shed thousands of jobs as the tech sector cuts costs in a bid to boost profitability.

The Telegraph, UK

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