Demand for AI helps Microsoft outperform financial expectations

Microsoft has beaten Wall Street expectations, posting better than expected revenues as its cloud computing and office software business grew amid increasing demand for artificial intelligence (AI).

Revenue rose to $56.2bn in the fourth quarter, the three months up to the end of June – up 8% on the same period a year ago. It is greater than the 7% expected by analysts.

The company chairman and chief executive, Satya Nadella, said Microsoft was “focused on leading the new AI platform shift”, as tech giants compete to develop AI products and companies seek to quickly adopt AI.

“Organizations are asking not only how – but how fast – they can apply this next generation of AI to address the biggest opportunities and challenges they face – safely and responsibly,” Mr Nadella said.

Investors and tech developers have been seeking to get a foothold in the burgeoning AI boom.

Microsoft is one of the main competitors in the AI race. It invested in OpenAI, the maker of generative AI chatbot, ChatGPT.

It has also invested in its own products.