Cloud services are transforming tech companies after last year’s recession.Thank you for reading this post, don't forget to subscribe!
Big Tech is making a comeback after a difficult year as the sector giants reported their quarterly figures this week with the benefit of investment in generative artificial intelligence (AI) amid the cloud service race.
In 2022, tech companies saw mass layoffs and other cost-cutting measures after advertisers and consumers cut spending amid an unstable economic environment.
But the launch of OpenAI’s ChatGPIT chatbot late last year is helping tech companies change that.
Microsoft, which has invested $10 billion (€9.4 billion) in OpenAI, on Tuesday reported revenue growth of nearly 13 percent year-on-year to $56.5 billion (€53 billion).
The tech giant’s AI investments helped boost sales in the September quarter, especially in its Azure cloud program.
“With Co-Pilot, we are making the age of AI real for people and businesses everywhere,” Satya Nadella, Microsoft chairman and CEO, said in a statement.
“We are increasingly incorporating AI at every layer of the technology stack and into every role and business process to increase productivity for our customers.”
The race to add generative AI to products
As for Google’s parent company Alphabet, the company reported quarterly sales of $76.69 billion (€72 billion), up 11 percent from the same period a year earlier.
But growth in Alphabet’s cloud sector was at a nearly three-year low and cloud revenue was $20 million (€18 million) less than analysts had expected. The market reacted again on Wednesday with Alphabet shares falling 8 percent.
Google is racing to add generative AI to more of its products and Alphabet’s cloud division is trying to catch up with Microsoft’s Azure and Amazon Web Services (AWS).
On Wednesday, AWS announced a major cloud development, saying the company will launch an independent cloud service in Europe.
The Amazon Web Services European Sovereign Cloud will create a space for highly regulated companies and the public sector to store and house data in the EU.
It comes as the bloc gets tougher on data being held on non-European company servers and as it pushes for “digital sovereignty,” the idea that the EU should control its own data and technology. .
Amazon is scheduled to release its third-quarter results on Thursday.