Microsoft, Google and AMD recently presented quarterly results for the final quarter of 2023. That year was dominated by AI for these companies, as it was for many others in the IT industry. A lot of promises have been made around that technology, and shareholders expect to see some of that in the numbers.
In general, the quarterly figures show that it is difficult to meet investors’ expectations around the AI hype. Still, the tech giants remain positive about the investments made in AI. They think the results are not there yet but will be coming soon.
In its presentation, Microsoft highlighted the high adoption rate of its AI assistant Copilot. Google gave credit to its own assistant for making improvements across its services. Mainly the search engine and cloud computing services would benefit from its own AI resources. AMD then threw in another prediction and thinks its new AI processors will sell better than first thought.
AI does drive revenue growth
Investor disappointment may also be due to incorrect expectations. For example, the results were well absorbed by other branches in which Microsoft and Google still operate. Importantly, those branches are getting a boost because of the increased interest in AI.
Microsoft, for example, saw the last quarter of 2023’s largest revenue growth in the past year. It was an overall growth of 18 percent. That growth was driven by increased customer spending on cloud computing. A service from which Google also derived a lot of revenue last quarter. The increased interest in cloud computing was then, in turn, driven by customer interest in AI.
In fact, at AMD, without the AI chip MI300, the quarterly results would have been an utter fiasco. The company could hardly meet any of its expectations and could only give investors hope by raising expectations for sales of this chip. It now estimates that MI300 should bring in $3.5 billion.
Also read: AMD suggests its AI chip will make them $2 billion in a year
Continue to take advantage of the cloud
Furthermore, cloud divisions appeared to generate sustained profits. Microsoft’s Azure provided a favourable impact on the figures by pushing up revenue growth by 30 percent. Expectations were at 28 percent growth.
Google even doubled expectations for profits from Google Cloud. These totalled $864 million.
Recent developments in AI
Generating revenue from proprietary AI tools would, by the way, always have been difficult to meet expectations. Microsoft really launched the Copilot story from this year on. That is because the year began with a new Copilot app for Android and iOS. Just days later, that news was followed up with a new Copilot button that will become a permanent fixture on new Windows devices. Later in the month, the tech giant launched another offering aimed at business users with 1 to 299 workstations.
Also read: Microsoft makes Copilot a fixture in every desktop and smartphone
Google has yet to roll out the most significant AI upgrade with Gemini Ultra. The company is setting high expectations for that AI model and indicates the model will be a more powerful model than GPT-4. For that model, the company also appears to be already thinking about ways to generate revenue. Google has also confirmed earlier rumours about Gemini Ultra only being available in a paid version of AI chatbot Bard.
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