Microsoft and Google’s earnings tell a tale of two clouds

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Microsoft and Google told two different stories about their cloud businesses during their earnings calls on Tuesday.

) reported their earnings after the bell Tuesday for what investors hoped would be an explosion of artificial intelligence power from both tech giants.It was a tale of two clouds for the rivals. While Microsoft outpaced analysts’ predictions, Google fell short, and investors reacted in turn, driving shares of Microsoft higher some 4% in early trading Wednesday, while Google shares sank more than 8%.

Microsoft has been pouring money into its AI efforts, including a multibillion-dollar investment in ChatGPT developer OpenAI. And with AI permeating seemingly every aspect of Microsoft’s enterprise and, increasingly, consumer offerings, those investments are beginning to bear fruit. Google is also, importantly, working on building out its Search Generative Experience , which is a form of Google Search that uses generative AI capabilities to provide answers to users’ queries. More specifically, Pichai explained, Google is ensuring it has the right ad experience for the product.

So while Google’s AI cloud efforts might not be paying off as well as Microsoft’s, it’s still making strong moves in its most important business segment: advertising. A biotech firm founded by Vivek Ramaswamy turned $15 million into $5 billion by flipping a bowel-disease treatment that Pfizer gave it for free

 

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