Sean Gallup
It was clear from the start what was on Microsoft (Nasdaq: MSFT) CEO Satya Nadella’s mind while speaking on a conference call Tuesday to discuss his company’s financial third-quarter results. It can be summed up in just two letters:
Amnesty International.
Of course, AI stands for artificial intelligence. But, by now, the term artificial intelligence has become so ubiquitous that Nadella, Microsoft (MSFT) Chief Financial Officer (MSFT) Amy Hood had to say to get the attention of Wall Street analysts, and everyone else who was listening in on a late-night company conference call. from Tuesday. The two made it clear that artificial intelligence will not pass as a fad that Microsoft (MSFT) will get bored and forget any time soon.
Nadella said that Microsoft (MSFT) is putting more investment into AI, and that the company is “not shy about investing where we need to invest to seize the opportunity” of the AI market.
“During these transitional periods, what opportunity is there,” Nadella asked. “We’ve got a mixed play to chase that opportunity, and we feel like we’ve got good progression and performances up and down the (programs) stack.”
Nadella also went into some detail about what came of Microsoft’s (MSFT) billion-dollar investment and partnership with ChatGPT developer OpenAI. Nadella said Microsoft’s Azure Cloud Service (MSFT) was one of the key outlets for that relationship, with more than 3,500 Azure/Open AI service customers using ChatGPT, or GPT-4, language model technology. Nadella said that number is 10 times higher than it was just a quarter ago.
CFO Hood shared AI’s comment as well, and said that because Microsoft (MSFT) is managing itself strategically, “we’ll continue to invest in AI infrastructure that drives revenue over time.”
While AI has become a hot topic recently, there have been some calls for governments to put in place new guidelines and practices to ensure the security of individuals in the new world of AI.
But on technology safeguards, Nadella said Microsoft (MSFT) is not waiting for regulation enforcement from Washington, D.C. to tell the company what to do.
“We’re thinking things through and building all the safeguards now and subjecting ourselves to internal scrutiny,” Nadella said. “Basically, we feel good about putting trust in the systems that we’re putting in there.”
Nadella and Hood’s comments came as shares of Microsoft (MSFT) rose nearly 9% in after-hours trading following a better-than-expected fiscal third-quarter earnings report.