Microsoft's App Business Aids AI Revenue Model

Compared to Amazon Web Services or Google Cloud, Microsoft benefits from an extensive enterprise software business where AI features can be added rapidly. At least for the moment, that seems to have provided a revenue spark for Microsoft overall, and for Microsoft Cloud operations in particular. 

As Amy Hood, Microsoft CFO said, “strong demand for our Microsoft cloud offerings, including AI services” contributed to the fact that “Azure and other cloud services revenue grew 30 percent and 28 percent in constant currency, including six points of growth from AI services,” Hood said. 

Satya Nadella, Microsoft CEO, pointed out that Microsoft Cloud surpassed $33 billion in revenue and was “up 24 percent,” while Azure AI customers surpassed 53,000. “Over one third are new to Azure over the past 12 months,” perhaps based on the ability to use LLMs from Cohere, Meta and Mistral on Azure without having to manage underlying infrastructure, Nadella suggested. 

Also, Microsoft noted 1.3 million paid GitHub Copilot subscribers, up 30 percent quarter over quarter, and more than 50,000 organizations using GitHub Copilot.