Oct 30, 2024 - Technology

Microsoft says AI is on pace to be a $10 billion-a-year business

Ina Fried

Microsoft CEO Satya Nadella speaks during the Microsoft Build conference at Seattle Convention Center Summit Building in Seattle, Washington, on May 21, 2024 — Microsoft CEO Satya Nadella speaks during the Microsoft Build conference in Seattle. Photo: Jason Redmond / AFP via Getty Images.

Microsoft CEO Satya Nadella said Wednesday that the company's AI business will soon hit a $10 billion annual run rate, the fastest product category to reach that mark.

Why it matters: The newly provided figure shows how Microsoft is seeing additional revenue, largely from its Azure cloud business, but also across other areas including its Microsoft 365 productivity business.

What they're saying: "Our AI business is on track to surpass an annual revenue run rate of $10 billion next quarter, which will make it the fastest business in our history to reach this milestone," Nadella said, kicking off a conference call following the company's quarterly earnings report.

Axios confirmed with Microsoft that was a reference to the current quarter, Microsoft's fiscal second quarter, which runs through December.
Microsoft also said that 70% of Fortune 500 companies use Microsoft 365 Copilot for at least some employees.

By the numbers: Microsoft reported per-share earnings of $3.30, on revenue of $65.6 billion, both ahead of analyst expectations.

Server products and cloud services revenue increased 23%, with Azure and other cloud services revenue growth up 33%.
Microsoft 365 commercial products and cloud services revenue increased 13%

The big picture: Microsoft is not alone in seeing an AI boost. Google reported Tuesday that its cloud business grew 34% year-over-year, in part from AI-related demand.

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Microsoft says AI is on pace to be a $10 billion-a-year business

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