Microsoft Corp on Wednesday reported profits of US$24.1 billion in the recently ended quarter, but shares slid on worries over its vital cloud computing business.
Revenue grew 12 percent year-on-year to US$69.6 billion and the amount of money taken in by its “intelligence cloud” unit including its flagship Azure computing platform climbed 19 percent from the same time last year to US$25.5 billion, but the market had expected more.
Microsoft’s productivity business segment, which includes its Office suite of e-mail and other workplace products, saw sales grow 14 percent to US$29.4 billion.
Photo: Bloomberg
Its personal computing business, led by its Windows division, remained steady at US$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 percent in after-hours trading on Wednesday, but were still higher than on 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 artificial intelligence (AI) start-up DeepSeek (深度求索).
“Microsoft had a fine quarter, but ‘fine’ isn’t what investors want from an AI juggernaut spending like it’s building the Death Star,” Emarketer principal analyst Jeremy Goldman said, referring to a planet-sized space station from the Star Wars films.
“The cloud is still a growth engine, but AI competition — especially from unexpected players like DeepSeek — is real,” Goldman said.
Microsoft chief executive Satya Nadella spotlighted the tech titan’s AI investments, saying the company is “innovating across our tech stack” to unlock the ability for customers to make money from the technology.
Nadella said Microsoft’s AI business is on pace to bring in more than US$13 billion annually, in a near tripling of the rate a year earlier.
The Redmond-based company has been at the forefront of the generative AI revolution, largely thanks to its partnership with OpenAI, the creator of ChatGPT.
The company has rolled out AI features at a furious pace, mainly under its Copilot brand, leaving investors hopeful for a return on investment from the expensive technology.
The company is on track to pump about US$80 billion into AI this fiscal year, Microsoft president Brad Smith wrote in an online post.
Smith contended AI is poised to transform all aspects of life, and it is imperative that the US be the global leader when it comes to the technology, he said.
While DeepSeek said that it was catching up to US tech titans on a fraction of their budget, Nadella downplayed such concerns on an investor call on 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 on Wednesday.
Additional reporting by AP
PROTECTION: The investigation, which takes aim at exporters such as Canada, Germany and Brazil, came days after Trump unveiled tariff hikes on steel and aluminum products US President Donald Trump on Saturday ordered a probe into potential tariffs on lumber imports — a move threatening to stoke trade tensions — while also pushing for a domestic supply boost. Trump signed an executive order instructing US Secretary of Commerce Howard Lutnick to begin an investigation “to determine the effects on the national security of imports of timber, lumber and their derivative products.” The study might result in new tariffs being imposed, which would pile on top of existing levies. The investigation takes aim at exporters like Canada, Germany and Brazil, with White House officials earlier accusing these economies of
EARLY TALKS: Measures under consideration include convincing allies to match US curbs, further restricting exports of AI chips or GPUs, and blocking Chinese investments US President Donald Trump’s administration is sketching out tougher versions of US semiconductor curbs and pressuring key allies to escalate their restrictions on China’s chip industry, an early indication the new US president plans to expand efforts that began under former US president Joe Biden to limit Beijing’s technological prowess. Trump officials recently met with their Japanese and Dutch counterparts about restricting Tokyo Electron Ltd and ASML Holding NV engineers from maintaining semiconductor gear in China, people familiar with the matter said. The aim, which was also a priority for Biden, is to see key allies match China curbs the US
Teleperformance SE, the largest call-center operator in the world, is rolling out an artificial intelligence (AI) system that softens English-speaking Indian workers’ accents in real time in a move the company claims would make them more understandable. The technology, called accent translation, coupled with background noise cancelation, is being deployed in call centers in India, where workers provide customer support to some of Teleperformance’s international clients. The company provides outsourced customer support and content moderation to global companies including Apple Inc, ByteDance Ltd’s (字節跳動) TikTok and Samsung Electronics Co Ltd. “When you have an Indian agent on the line, sometimes it’s hard
‘SACRED MOUNTAIN’: The chipmaker can form joint ventures abroad, except in China, but like other firms, it needs government approval for large investments Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) needs government permission for any overseas joint ventures (JVs), but there are no restrictions on making the most advanced chips overseas other than for China, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. US media have said that TSMC, the world’s largest contract chipmaker and a major supplier to companies such as Apple Inc and Nvidia Corp, has been in talks for a stake in Intel Corp. Neither company has confirmed the talks, but US President Donald Trump has accused Taiwan of taking away the US’ semiconductor business and said he wants the industry back
RSS