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Microsoft clarifies the advantages of AI and updates business unit reporting

By Consultants Review Team Thursday, 22 August 2024

In an effort to provide investors a more accurate picture of the contributions of artificial intelligence, Microsoft reorganized how it discloses results for its business divisions on Wednesday. Specifically, certain search and news advertising income was moved under the Azure cloud computing unit.

The productivity division of the corporation, which is home to the Office software suite, which includes Word and PowerPoint, is also receiving money from Nuance's AI and voice technology services, according to the statement.

A adjustment to its projection for the September quarter and a restatement of sales growth at these divisions for the previous fiscal year resulted from the revisions.

The change is a result of investor pressure on major tech firms, like Microsoft, to demonstrate the return on the billions of dollars they have been spending on AI.

Although it had said that cloud business growth will pick up speed in the second half of fiscal 2025, the firm reported sluggish growth in this area in July.

Having previously predicted sales of between $28.6 billion and $28.9 billion, the business now projects intelligent cloud revenue to be between $23.80 billion and $24.10 billion.

Additionally, Microsoft lowered its quarterly projection for its more personal computer division from its previous estimate of $14.9 billion to $15.3 billion to between $12.25 billion and $12.65 billion.

But instead of $20.3 billion and $20.6 billion, it increased the expectation for productivity and business processes to between $27.75 billion and $28.05 billion.

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