Just days after announcing intentions to reduce its employment by more than a quarter, IT giant Microsoft reports that its profits for the three months ending in September surged to more than $36.6 billion (£27.5 billion). The Windows creator announced on Monday that it would provide buyouts to some 60,000 employees in order to reduce expenses while investing billions of dollars in artificial intelligence (AI). Microsoft, like many other large tech companies, is making significant investments in the infrastructure that underpins artificial intelligence, even though it is yet unclear if these expenditures will be profitable.
In New York’s after-hours trade on Wednesday, Microsoft shares increased by over 2.9%. Investors have been keeping a careful eye on tech companies’ recent financial performance in order to determine whether the significant expenditure on AI is sustainable. It is anticipated that major internet firms like Amazon, Meta, and Alphabet will spend over $700 billion on AI processors and data center infrastructure this year. Due to robust growth in its cloud computing sector, Microsoft reported on Wednesday that its quarterly revenue increased to $92.3 billion, up 19% over the same period last year. A 30% increase in sales for Microsoft Cloud, its suite of enterprise technology services, boosted the company’s earnings.
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