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Microsoft’s Activision acquisition and bets on AI yield high quarterly revenue

Jan 30, 2024 - theguardian.com
Microsoft exceeded analyst expectations with a reported revenue of $62bn, an 18% increase year-over-year, driven by its AI applications, particularly in its Azure cloud computing unit. The company's cloud revenue rose 24% year-over-year, and its Xbox content and services division saw a 61% increase due to the Activision Blizzard acquisition. Microsoft, now the world's most valuable company, recently reached a stock market valuation of $3tn and is seen as a leading player in AI, holding the largest share in OpenAI.

However, Microsoft's rapid growth in AI has attracted regulatory scrutiny. The US Federal Trade Commission has begun investigating the company's $10bn investment in OpenAI, with similar investigations potentially opening in the European Union. The UK's Competition and Markets Authority is also examining the deal. Despite these concerns, Microsoft's shares rose 10% over the past month. The company recently reported its first earnings with Activision Blizzard, following a $69bn acquisition, and laid off 1,900 employees across its gaming division due to redundancies.

Key takeaways:

  • Microsoft reported revenue of $62bn, surpassing anticipated earnings of $61.1bn, with a significant contribution from its Azure cloud computing unit and AI applications.
  • Revenue from its Xbox content and services division increased 61% driven by the Activision Blizzard acquisition.
  • Microsoft's $10bn investment in OpenAI is under investigation by the US Federal Trade Commission, with similar investigations potentially opening in the European Union and the United Kingdom.
  • Microsoft completed its acquisition of video game maker Activision Blizzard for $69bn, and subsequently laid off 1,900 employees across its gaming division due to redundancies.
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