Both companies saw profits driven by AI services in cloud computing products and search engines.
Google-parent Alphabet reported revenue above $80 billion for Q3.
Microsoft reported a revenue jump of 17% to almost $62 billion for Q3.
Artificial Intelligence (AI) is revolutionizing the tech industry, and the biggest tech companies are investing heavily in this technology. In the latest quarterly earnings reports, Microsoft and Google both saw significant profit increases driven by their AI services.
Microsoft reported a revenue jump of 17% to almost $62 billion for the latest quarter. The company's profits were driven by customers adopting AI services across its cloud computing products. Microsoft is a major backer of OpenAI, which created the popular chatbot ChatGPT, and this investment seems to be paying off.
Google-parent Alphabet also reported strong earnings for the latest quarter, with revenue jumping above $80 billion. CEO Sundar Pichai announced that AI was already boosting results from Google's search engine. The tech giant plans to spend around $12 billion or more each quarter this year on capital expenditures, much of which will be for new data centers.
These investments in AI are not only driving profits but also creating opportunities for growth. However, the cost of building these new services is a challenge that both companies face. Regulators in the US and Europe are also scrutinizing partnerships between tech giants and start-ups like OpenAI and Anthropic, raising concerns about competition.
Despite these challenges, Microsoft and Google's strong earnings reports highlight the potential of AI to transform industries and boost profits. The race for AI dominance is far from over.
Microsoft and Google reported earnings on Friday, with Microsoft’s earnings and revenue growth exceeding expectations and Google’s earnings surging 61%.
, Microsoft forecast strong cloud growth going forward and expects capital spending to increase materially in the current Q4.
Google announced its first-ever quarterly dividend of 20 cents a share and a $70 billion buyback.
Accuracy
Microsoft forecast strong cloud growth going forward and expects capital spending to increase materially in the current Q4.
The biggest tech companies had already been spending steadily on AI research and development before OpenAI released ChatGPT in late 2022, but its instant success triggered a sudden ramp up in spending.
