Shulou(Shulou.com)11/24 Report--

April 27 (Xinhua)-- although Microsoft's massive investment in artificial intelligence is still in its early stages, there are signs that Microsoft's partnership with ChatGPT developer OpenAI has yielded tangible financial benefits.

Microsoft expects cloud computing division Azure's revenue to grow 26% to 27% next quarter compared with the same period last year, of which "artificial intelligence services account for about 1%," Microsoft chief financial officer Amy Hood said on an earnings call in the first quarter of 2023.

Wall Street analysts believe that this shows that Microsoft's large investment in artificial intelligence has brought real financial benefits, indicating that there is more room for growth in the future.

"this is a huge number," Mark Moerdler, an analyst at Bernstein, an investment bank, wrote in a note to clients. "artificial intelligence, which has been part of the Azure story for many years, has now generated an increment of 1 per cent, suggesting that the demand for artificial intelligence will be a big driver of Azure after the GPT announcement."

He added that this suggests that Microsoft may overtake Google in artificial intelligence and that Azure could become a "larger and more important provider of super-large-scale cloud services" than AWS, Amazon's web service.

Investors also agreed, with Microsoft shares up more than 7% on Wednesday. Microsoft shares have risen more than 23 per cent so far this year, compared with just 6 per cent in the market over the same period.

The cooperation between Microsoft and ChatGPT developer OpenAI has set off a new wave of innovation in the field of artificial intelligence.

This has shaken up the entire industry. Microsoft's integration of the large language model behind ChatGPT and Bing search has put a lot of pressure on Google's monopoly in the search field. The viral spread of ChatGPT seems to have brought more appeal to Bing.

In an earnings call on Tuesday, Satya Satya Nadella, Microsoft's chief executive, stressed that investing in a "new wave" of artificial intelligence and expanding the company's market share was a top priority.

Given that Microsoft announced a $10 billion investment in OpenAI earlier this year, some analysts also question what value the partnership with OpenAI will bring to the company.

Nadella says Microsoft's work on artificial intelligence is bringing the company new conversations with customers, generating new sources of revenue. Some analysts believe that Microsoft is cashing out its artificial intelligence investment in the right direction.

"although the transformation of the artificial intelligence platform is still in its early stages and monetization is still in the process of being formed, Microsoft management is as optimistic about market opportunities as we expected," RishiJaluria, an analyst at Royal Bank of Canada, said in a note to clients.

Alex Zujin, an analyst at market research firm Wolfe Research, agrees. "We also believe that OpenAI's ingenuity has driven not only significant innovation in Microsoft's product portfolio, but also a means of driving innovation in productivity tools," he said.

"the story of artificial intelligence is just beginning," said Dan Ives, an analyst at Wedbush. "Microsoft is leading this wave of competition in artificial intelligence technology."

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