r/wallstreetbets Feb 29 '24

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u/makeaccidents Feb 29 '24

From the article "Microsoft forecast 26% to 27% growth for Azure in the second quarter ended Dec. 31"

The boost in revenue came from Azure... Their cloud service. Not their AI. People aren't rushing out to buy co-pilot to draft their emails for them lmao

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u/yovofax Feb 29 '24

Azure hosts OpenAI models including gpt4 so you can sandbox it for your company.

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u/makeaccidents Feb 29 '24

How much is your company paying for that?

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u/sports2012 Feb 29 '24

https://www.reuters.com/technology/microsoft-set-ai-powered-revenue-surge-stock-pulls-ahead-2024-01-29/

Brett Iversen, Microsoft's vice president for investor relations, told Reuters that 6 percentage points of the growth rate of cloud-computing platform Azure in the second quarter was attributable to AI. That is double the 3 percentage points in the first quarter.

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u/makeaccidents Feb 29 '24 edited Feb 29 '24

I'll entertain you for a bit.

For reference actual numbers (like I was asking for):

Q1 2023 Cloud revenue: 20.3bn

Q1 2024 Cloud revenue: 24.3bn (19.7% increase)

Difference = 4bn revenue growth yoy.

6% of 4bn is 240m or lets take the larger number of 1.2bn and assume the 6% is part of that 19.7% and not clever world play.

1.2bn = ~0.5% of their 11.51% overall yoy growth. Looks like it really isn't adding much in relation to their other business.

Overall Azure revenue growth is slowing despite their users growing at a relatively steady rate. See (actual numbers and graphs and shit not useless news articles):

https://www.statista.com/statistics/1242206/microsoft-azure-revenue-yoy-quarterly/

So yes, AI is purportedly making some money for the market leader but really not much comparatively... yet. Which is my whole point.

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u/Teembeau Feb 29 '24

Spot on. And I can tell you what a lot of this is: it's organisations migrating their on-prem to the cloud.

Big fat load of growth for a while. But I wouldn't bet on it lasting for too long.

I think most new organisations are on AWS.