Generative AI is having transformational impacts on Microsoft, which is infusing its entire product suite from Dynamics 365 to Azure to Teams and beyond with integrations and enhancements driven by the powerful capabilities of new world-changing AI technology.
During its fiscal 2023 third-quarter earnings call on Tuesday (April 25), Microsoft Chairman and CEO Satya Nadella recited a litany of use cases and partnerships illustrating how the computing giant is bringing advanced Generative AI to clients through the “multiyear, multibillion-dollar investment” announced between OpenAI and Microsoft in January.
As to the state of web search, Nadella said, “Two months since the launch of new Bing and Edge, we are really encouraged by user feedback and usage patterns. All up, Bing has more than 100 million daily active users, and we’re winning new customers on Windows with mobile. Daily installs of the Bing mobile app have grown 4x since launch.”
He added that “when people use these new AI features, their engagement with Bing and Edge goes up. As we look towards a future where chat becomes a new way for people to seek information, consumers have real choice in business models and modalities with Azure-powered chat entry points across Bing, Edge, Windows and OpenAI’s Chat GPT. We look forward to continuing this journey in what is a generational shift in the largest software category, search.”
In Cloud computing, Nadella said, “Azure took share as customers continue to choose our ubiquitous computing fabric, from Cloud to Edge, especially as every application becomes AI-powered. We have the most powerful AI infrastructure, and it is being used by our partner OpenAI as well as Nvidia and leading AI startups like Adept and Inflection to train large models. Our Azure OpenAI service brings together advanced models including Chat GPT and GPT-4 with the enterprise capabilities of Azure.”
He said Microsoft now has more than 2,500 Azure OpenAI service customers, “up 10x quarter over quarter.” Noting that Azure also powers OpenAI API, Nadella said, “We are pleased to see brands like Shopify and Snap use the API to integrate OpenAI’s models.”
For example, he said Unilever “went all in on Azure this quarter” in one of the largest ever cloud migrations in the consumer goods industry, adding that “IKEA retail, ING Bank, Rabobank, Telstra, and Wolverine Worldwide all use Azure Arc to run Azure services across on-premise, Edge and multi-cloud environments, with the Azure Arc user base up over 150% year over year.
Azure Arc is the Microsoft bridge technology for building cloud-native applications between platforms, data centers, IoT devices and other connected systems.
Talking up the growth of Microsoft Power Platform, its low-code developer environment, he said, “More than 36,000 organizations have already used AI existing capabilities in Power Platform, and with our new Copilot and Power apps, we’re extending these capabilities to end users who can interact with any app through conversation instead of clicks. All up, we now have nearly 33 million monthly active users of Power Platform, up nearly 50% year over year.”
As for the Microsoft 365 Copilot tool announced in March, Nadella said Copilot “combines next-generation AI with business data in the Microsoft Graph and Microsoft 365 applications removing the drudgery and unleashing the creativity of work.” He added that Copilot also powers business chat, “which uses natural language to surface information and insights based on business content and context. We’ve been encouraged by early feedback and look forward to bringing these experiences to more users in the coming months,” he said.
On Microsoft Teams, Nadella said usage of the collaboration platform “is at an all-time high and surpassed 300 million monthly active users this quarter. With a new version twice as fast and using half the power, he said, “Teams is also expanding our TAM” Teams Phone, Team Rooms and Teams Premium. He noted that “Teams Premium meets enterprise demand for AI-powered features like intelligent recap. Now generally available, it’s one of our fastest-growing modern work products ever with thousands of paid customers just two months in.”
With 930 million members, LinkedIn is seeing strong uptake in new markets like India, where it now has 100 million members, and he said, “As Gen Z enters the workforce we saw a 73% year over year increase in the number of students signups.”
In gaming, during fiscal Q3 Microsoft brought its X-Box PC Game Pass to 14 new countries, “nearly doubling the number of markets we are available,” Nadella said, pointing to its base of close to 500 million lifetime unique users and a pipeline of hot games forthcoming including Minecraft Legends and Red Bull.
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