Microsoft revenue was $61.9 billion in the quarter ending March 31, up 17 percent compared to the same period a year ago. Profit was up 20 percent, to $21.9 billion, despite an increase in capital expenditure to purchase Nvidia GPUs for training and running AI models. The performance smashed analyst predictions, sending the stock up 5 percent in after-hours trading. Revenue for the Microsoft Cloud division overall was $35.1 billion, up 23 percent year-over-year, fueled largely by customers using it to host resource intensive AI services. Revenue in the Intelligent Cloud sector was $26.7 billion, a 21 percent uptick.

“Microsoft reported $12.5 billion in operating income in its AI-heavy Intelligent Cloud division, well above estimates of $12.1 billion,” reports Forbes. Microsoft credited “Azure and other cloud services” with a 31 percent revenue gain, according to the company’s earnings release.

“Microsoft said that 7 percentage points of the Azure growth came from its AI services, up from 6 percentage points the previous quarter,” The Wall Street Journal writes.

“In recent quarters, Microsoft’s AI push has helped it gain market share from Amazon, the leading cloud services provider. In January, the company said 53,000 customers were using its cloud AI services, with a third of them new to Azure,” notes The New York Times.

Microsoft CEO Satya Nadella said on the earnings call that “Azure has become a port of call for pretty much anybody who is doing any AI project.”

Following a year in which “Microsoft began its push to put AI into everything it does,” that investment is beginning to bear fruit, per NYT. Artificial intelligence has driven demand for Microsoft software as well as cloud services.

Microsoft was prescient in forming an early relationship with startup OpenAI, maker of ChatGPT, weaving its technology into Microsoft’s Copilot feature, which WSJ describes as “AI assistants that plug into key offerings like its workplace software suite, Microsoft 365.”

Microsoft’s Q3 for fiscal 2024 “was the first full quarter when commercial customers could get a version of Microsoft’s productivity suite with AI tools, like transcribing virtual meetings in Teams or summarizing documents in Word,” NYT notes.

Copilot subscriptions cost $30 per user per month, and while Microsoft didn’t disclose how many were sold, NYT says subscriptions overall “grew 15 percent,” and that Nadella “said a number of corporate customers, including the oil giant BP and the drugmaker Novo Nordisk, had bought more than 10,000 licenses each.”

Windows OEM revenue was up 11 percent for the quarter,” writes The Verge, adding that Microsoft is hoping to boost it further over the summer “with the launch of what it calls ‘AI PCs’ that are powered by Qualcomm’s latest Snapdragon chips.”