Microsoft’s AI Business Soars with $13 Billion Annual Revenue
Microsoft Corporation recently reported robust earnings for the second quarter of fiscal 2025. The tech giant’s artificial intelligence (AI) business reached an impressive annual revenue run rate of $13 billion, marking a 175% increase year-over-year. The company’s total revenue was $69.6 billion, surpassing analyst expectations.
The standout performance was primarily driven by Microsoft’s cloud computing division. Azure and other cloud services witnessed a growth of 31% year-over-year, with AI services contributing 13 percentage points to this growth. Microsoft Cloud revenue reached $40.9 billion, a 21% increase from the previous year.
“We are innovating across our tech stack and helping customers unlock the full ROI of AI,” stated CEO Satya Nadella. Despite this success, the company experienced a $3.1 billion hit to net income due to its substantial investment in OpenAI. This reflects the massive capital requirements of the AI revolution.
These earnings have raised questions about AI infrastructure spending and efficiency, especially following breakthroughs from China’s DeepSeek. These developments have increased scrutiny about capital expenditure in the AI sector. However, Microsoft’s diversified approach across productivity software, cloud services, and AI positions it strongly for continued growth.
Source: GeekWire