This year alone, Microsoft has sunk $64 billion into infrastructure, much of it driving the AI growth through data centres powering services like Copilot in Microsoft 365. 

While most tech firms are cautiously navigating unstable markets, Microsoft’s share price has surged over 30%, a sign investors are betting on the company’s aggressive AI focus.

Behind the scenes, Microsoft appears to be recalibrating its alliance with OpenAI. Though the two remain close, with Microsoft still a strategic backer, OpenAI has been given leeway to partner with others, including Oracle, on the massive Stargate data centre project in Texas.

What’s happening is Microsoft is gradually placing itself as a neutral technology provider, what some are calling an “arms dealer” in the AI wars, rather than locking into exclusive alliances. This neutrality allows it to offer AI tools across industries without being boxed in by one partner’s limitations or priorities.

Meanwhile, demand for AI services in Azure, Microsoft’s cloud platform, is climbing. CEO Satya Nadella has suggested that AI costs can be drastically reduced through algorithmic efficiency. “Once it settles on an algorithm and begins to optimise it, Microsoft can obtain 10 times better performance for the same computing costs,” he said. That’s the kind of return that could redefine tech margins.

The company is also being tactical about how it handles computational surges. Instead of building more expensive data centres, Microsoft is leaning on “neocloud” providers like CoreWeave. These firms specialise in delivering Nvidia-powered AI infrastructure on demand. It’s a leaner, faster, more flexible approach to scaling.

Cantor Fitzgerald analyst Thomas Blakey said: “If they have to flex up in some way, they’ve been consistently saying that they’re going to shift away from buying more data centres and dirt and cement and they’re going to leave that to the neoclouds.”

The Microsoft Build 2025 conference, running until May 22, is not just a developer gathering this year. It’s a moment of clarity about Microsoft’s vision to take over the AI stack, monetise it, and use every tool, from GitHub to Azure, to keep developers building inside its ecosystem.

As confirmed by Microsoft CEO Satya Nadella during the company’s Q2 earnings report on Wednesday, overall, LinkedIn’s revenue grew by 9% year-on-year, steadily expanding though there were challenges in some of its business segments.

The professional networking platform, which has over a billion users, has not disclosed its total revenue for the period or the specific performance of its other business divisions. 

However, past figures reveal some perspective—by March 2024, LinkedIn’s Premium subscriptions had brought in $1.7 billion, and estimates show that its total revenue for 2024 reached approximately $16.2 billion. This implies Premium subscriptions account for around 12.5% of LinkedIn’s overall earnings.

Nonetheless, LinkedIn has to compete within Microsoft’s portfolio, particularly with artificial intelligence (AI) services. Nadella highlighted in his comments that AI contributed $13 billion in annual revenue this quarter alone, a 175% increase from the previous year. 

LinkedIn has also warned that its revenue growth could slow in the coming months due to challenges in its Talent Solutions division, which provides recruitment-related services.

Even at that, the company is positive about the future of its Premium offerings. LinkedIn has been enhancing its paid tiers with additional features, including AI-driven job search tools and career development assistance. 

These initiatives appear to be resonating with subscribers, as nearly 40% of Premium users are actively engaging with the platform’s AI capabilities.

Speaking on LinkedIn’s success in growing its subscription business, CEO Ryan Roslansky said, “Building a $2B revenue subscription business is something only a handful of digitally native companies in history have ever accomplished. We’re focused on designing and continuing to iterate on a model that is value-orientated to meet the needs of our subscribers—those who want to accelerate their career or grow their business.”

While Microsoft’s overall earnings report revealed a slowdown in its cloud business, LinkedIn’s Premium revenue growth reveals its strategy of integrating AI-powered tools and exclusive features into its paid tiers is proving effective. 

However, with growth projections in the “low- to mid-single digits” for the near future, the company will need to continue enhancing its services to sustain growth.

The tech giant reported a net income of $88.1 billion, a 22% increase from the previous fiscal year. This growth is a result of the company’s continued expansion and success in key areas like cloud computing and productivity solutions.

Microsoft’s overall revenue for the year reached $245.1 billion, a 16% rise from the prior year. Its operating income also saw a good increase, climbing to $109.4 billion, up 24% year-on-year. These reiterate the company’s solid performance and focus on innovation and customer trust.

In the fourth quarter alone, Microsoft reported revenue of $64.7 billion, a 15% increase compared to the same quarter last year. The Intelligent Cloud segment, which includes Azure and other cloud services, generated $28.5 billion in revenue, making a 19% growth.

Azure itself experienced a 29% increase, highlighting its importance in the company’s success.

Productivity and Business Processes, another key area, saw revenue of $20.3 billion, up 11%. This growth was driven by strong performances in Office 365 Commercial and Dynamics 365, which grew 13% and 19% respectively. Meanwhile, LinkedIn’s revenue rose by 10%, further contributing to the segment’s success.

The More Personal Computing segment also performed well, with a 14% increase in revenue, reaching $15.9 billion. Notably, Xbox content and services experienced a 61% surge, largely influenced by the Activision acquisition.

CEO Satya Nadella commented on the company’s focus on innovation and meeting customer needs, “As a platform company, we are focused on meeting the mission-critical needs of our customers across our at-scale platforms today, while also ensuring we lead the AI era.”

CFO Amy Hood highlighted record bookings and a strong Microsoft Cloud performance, with quarterly revenue reaching $36.8 billion, up 21%.

Microsoft fiscal year results show that the company is strategically leveraging cloud services and AI, ensuring growth and innovation. 

Microsoft returned $8.4 billion to shareholders in the fourth quarter through share repurchases and dividends, delivering value to investors.

While much of the fear mongering is based on hearsay and outright speculation, there certainly are legitimate concerns.

However, businesses and consumers have more than enough reason to believe — and trust — AI’s ability to add significant value to their processes and lives.

Customer communication management (CCM), infused with complementary AI, has literally shifted the goalposts for what businesses can achieve with personalised, accurate and compliant customer communication at scale.

On the other hand, screaming headlines work people into a state. Rumours have surfaced that Sam Altman’s departure from OpenAI, before his return amidst the furore, was linked to concerns among OpenAI board members that significant breakthroughs in artificial general intelligence (AGI) had been made, and that Altman was rushing these into production without sufficient safeguards for society at large. The stuff of horror movies.

AGI refers to an advanced form of AI that can perform many activities as well as, or better than, humans. Many followers of AI think that AGI is closer than we may believe.

Let’s be clear: the real reason behind Altman’s departure is not known, and may be unrelated to AGI. It is also important to highlight that AI experts are divided on whether true AGI is imminent, or even likely.

I would suggest that even if the output of AI approximates that of the human mind, such as when Deep Blue stunned the world when it beat a reigning world chess champion, there is a critical difference between the approaches used by AI compared to those used by humans.

Sophisticated AI algorithms such as Large Language Models (LLMs) do not understand the meaning of concepts in the way humans do.

Computer algorithms tokenise words into numbers from the outset, which means they don’t imbue words with meaning in the same way as humans.

The AI Talk: Breaking Down ChatGPT and Google Bard – Which One Speaks Your Language?

More generally, for AGI to become a reality, there will need to be significant advances in AI’s ability to understand the meaning and context of patterns in the data, and not just detect them.

The question, then, becomes: What does any of this mean for businesses who wish to leverage the power of AI to improve their business processes and customer service?

As a point of departure, it’s interesting to read the views of Kevin Scott, Microsoft CTO, referring to Microsoft’s AI tool for its Office suite, in an article in the New Yorker.

“The Office Copilots seem simultaneously impressive and banal. They make mundane tasks easier, but they’re a long way from replacing human workers. They feel like a far cry from what was foretold by Sci-Fi novels. But they also feel like something that people might use every day,” he is quoted as saying.

The article goes on to say that if Scott, Microsoft CEO Satya Nadella and Chat GPT CTO Mira Murati get their way, then “AI will continue to steadily seep into our lives, at a pace gradual enough to accommodate the cautions required by short-term pessimism, and only as fast as humans are able to absorb how this technology ought to be used. There remains the possibility that things will get out of hand—and that the incremental creep of AI will prevent us from realising those dangers until it’s too late. But, for now, Scott and Murati feel confident that they can balance advancement and safety.”

This is a sound approach. What about the rest of us? Businesses have a responsibility to serve their shareholders, but also their customers and society more broadly. Treading a thoughtful line in the release of AI functionality to the market requires regular consideration of the benefits and potential risks.

It is crucial for business leaders to support the notion of good corporate citizenship in how they serve customers and develop products.

Regulation will play a massive role.  It appears as though EU lawmakers have concluded marathon discussions to put in place a regulatory framework for AI.

The framework will probably maintain a list of all AI models deemed to pose a systemic risk, and providers of general-purpose AI will be required to publish summaries of their algorithms and the content used to train them.

The EU is leading the global regulatory response to AI and could become the blueprint which other governments may follow.

If we cast our gaze back towards CCM, GhostDraft’s use of AI is specifically focused on supporting the generation of documents to capture contractual agreements between companies and their customers quickly and accurately. CCM is an absolutely crucial part of modern customer communication.

Gone are the days when document automation was sufficient. The smart and calibrated use of AI is a great example of how technology supports a transformative evolution of businesses’ capabilities to create mass communication that’s personalised, compliant, well-designed, dynamic and fast.

If a company cannot communicate clearly, quickly and accurately to its customers, it will lose them.

GhostDraft uses AI for design and development of communications templates and generative AI to analyse sample data, informing the structure and production of future documents.

It is enhancing the readability and completeness of key customer documents and forms, so that customers can feel comfortable about their business interactions.

It is clear that AI can improve customer service and interaction and it can make more relevant recommendations to customers, ensuring that they receive products and services tailored to their needs.

In addition to this, using AI can deliver cost efficiencies to businesses, which can then translate into more accessible and affordable services for customers. These benefits engender trust.

On the other hand, we already know that AI doesn’t understand context the way humans do. It doesn’t understand nuance, hope or fear. If we allow AI to have unfettered access to run business activities, it will miss things, and that is where customer trust will be damaged. In fact, the term “AI hallucination” refers to instances where AI tools identify patterns in the data which are actually non-existent or nonsensical.

There are practical ways this can be addressed over and above regulation. Businesses can restrict chatbot scope to simpler questions, and the routing of complex or nuanced business functions to humans. Giving users more control is also important.

Businesses can do this by offering users control over their data and the extent to which AI is used in their interactions, and by allowing users to easily opt in or opt out of AI-driven features.

When AI practitioners are building and training models, they would do well to record and selectively audit AI recommendations, and use this to refine their models.

Responsible businesses, meanwhile, should communicate clearly to customers how AI is being used in their products or services in a way that is understandable to non-technical users.

Referring to the new tools as an AI copilot for the web, Microsoft noted the goal to be the delivery of better search, more complete answers, a new chat experience and the ability to generate content. 

“AI will fundamentally change every software category, starting with the largest category of all – search,” said Satya Nadella, Chairman and CEO, Microsoft. “Today, we’re launching Bing and Edge powered by AI copilot and chat, to help people get more from search and the web.”

Explaining further, Microsoft explained that there are 10 billion search queries a day, but it estimates half of them go unanswered. That’s because people are using search to do things it wasn’t originally designed to do. It’s great for finding a website, but for more complex questions or tasks too often it falls short.

Elaborating on the capabilities of the new tools, the company emphasized bringing together search, browsing and chat into one unified experience you can invoke from anywhere on the web. These will deliver:

• Better search. The new Bing gives you an improved version of the familiar search experience, providing more relevant results for simple things like sports scores, stock prices and weather, along with a new sidebar that shows more comprehensive answers if you want them.
• Complete answers. Bing reviews result from across the web to find and summarize the answer you’re looking for. For example, you can get detailed instructions for how to substitute eggs for another ingredient in a cake you are baking right at that moment, without scrolling through multiple results.
• A new chat experience. For more complex searches – such as for planning a detailed trip itinerary or researching what TV to buy – the new Bing offers new, interactive chat. The chat experience empowers you to refine your search until you get the complete answer you are looking for by asking for more details, clarity and ideas – with links available so you can immediately act on your decisions.
• A creative spark. There are times when you need more than an answer – you need inspiration. The new Bing can generate content to help you. It can help you write an email, create a 5-day itinerary for a dream vacation to Hawaii, with links to book your travel and accommodations, prep for a job interview or create a quiz for trivia night. The new Bing also cites all its sources, so you’re able to see links to the web content it references.
• New Microsoft Edge experience. We’ve updated the Edge browser with new AI capabilities and a new look, and we’ve added two new functionalities: Chat and compose. With the Edge Sidebar, you can ask for a summary of a lengthy financial report to get the key takeaways – and then use the chat function to ask for a comparison to a competing company’s financials and automatically put it in a table. You can also ask Edge to help you compose content, such as a LinkedIn post, by giving it a few prompts to get you started. After that, you can ask it to help you update the tone, format and length of the post. Edge can understand the web page you’re on and adapts accordingly.

The new Bing experience is a culmination of four technical breakthroughs:

• Next-generation OpenAI model. The new Bing is running on a new, next-generation OpenAI large language model that is more powerful than ChatGPT and customized specifically for search. It takes key learnings and advancements from ChatGPT and GPT-3.5 – and it is even faster, more accurate and more capable.
• Microsoft Prometheus model. The company has developed a proprietary way of working with the OpenAI model that allows the best leverage of its power. Microsoft calls this collection of capabilities and techniques the Prometheus model. This combination gives you more relevant, timely and targeted results, with improved safety.
• Applying AI to core search algorithm. Microsoft also applied the AI model to its core Bing search ranking engine, which led to the largest jump in relevance in two decades. With this AI model, even basic search queries are more accurate and more relevant.
• New user experience. Microsoft is reimagining how you interact with search, browser and chat by pulling them into a unified experience. This will unlock a completely new way to interact with the web.