Microsoft's AI bets boost cloud business, Alphabet yet to find silver lining

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Google-parent Alphabet's cloud business suffered as long-time rival Microsoft's took off in the September quarter, demonstrating early signs that the Windows maker's investment in artificial intelligence was paying off.Alphabet's shares fell 7 per cent in after hours trading on Tuesday.

FILE PHOTO: A view shows a Microsoft logo at Microsoft offices in Issy-les-Moulineaux near Paris, France, January 25, 2023. REUTERS/Gonzalo Fuentes/File Photo

"In addition, it could be that Microsoft's very strong messaging on their Copilots and GenAI technology is getting companies to consider them in a more serious way." Alphabet too has deployed AI in dozens of its products such as its flagship Pixel phones and more recently experimented with adding generative AI to its search engine. Earlier this year, the company launched its generative AI chatbot called Bard that competes with ChatGPT.

RBC Capital Markets has previously estimated that Microsoft will clock over $3 billion in revenue from generative AI offerings this fiscal year. Microsoft executives say that figure is likely to grow each quarter this fiscal year, putting the company on track to spend more than $44 billion.

 

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