Over the past few months, all the tech giants have been jumping on the bandwagon, trying to get a piece of this wave of generative AI opportunity set in motion by big models. Microsoft, Google, and Amazon are among the most enthusiastic players - not only do they hold the cloud computing resources at the bottom core of the Big Model, but they also have their hands on digital products and tools that affect billions of people.

Recently, Microsoft, Google, and Amazon have released their second-quarter earnings reports for the natural year 2023, and AI-related revenues have become the object of focused attention in each of their earnings reports.

However, with the outside world on the high expectations of AI is completely different, AI is currently on the three tech giants revenue impact "minimal". Amazon and Google did not directly disclose AI revenue figures, Microsoft is the only company that clearly disclosed the figures, which Azure AI revenue accounted for only about 2% of Azure revenue, compared with 1% in the previous quarter.

However, all three vendors are coincidentally treating AI as a core strategy for the future and increasing capital investment in AI.

Amazon CEO Andrew R. Jassy said that every business within Amazon is planning to implement generative AI applications, especially in customer service and cost cutting. Amazon plans to invest more than $50 billion in cash by 2023, with a focus on technology investment in AWS.

Google CEO Sundar Pichai said that with generative AI, Google is taking the next step to refactor all of its core products, including search. Google expects the level of investment in technology infrastructure to rise, continuing to grow from the second half of 2023 through 2024, including investments in GPUs and proprietary TPUs, as well as data center capacity expansion.

Microsoft CEO Satya Nadella said AI Copilot will be Microsoft's third growth curve in the long run. To support the growth of Microsoft's cloud and the demand for AI platforms, Microsoft will accelerate its investment in cloud infrastructure, with capital expenditures increasing in each successive quarter throughout the year.

1. Amazon: generative AI is at a very early stage

Amazon shares soared nearly 10% after hours following the release of its Q2 2023 earnings report. Amazon's overall stock price is also up more than 50% so far this year, making it one of the few tech stocks that can continue to move higher.

The investment and application of artificial intelligence is mainly focused on Amazon cloud AWS. the earnings report showed that AWS revenue in the second quarter of this year amounted to $22.14 billion, an increase of 12% year-on-year, and the operating profit amounted to $5.37 billion, accounting for nearly 70% of the total operating profit.

However, the 12% growth rate is the lowest level since 2015. Starting in the first quarter of 2022, its revenue growth rate has fallen to 37% from 40% in the fourth quarter of 2021, and has continued to dip since then, with its revenue growth rate having been declining for six consecutive quarters.

Meanwhile, AWS realized an operating profit of $5.37 billion, a small decline from $5.72 billion in the same period last year, with an operating margin of 24.23%, lower than the operating margin levels of 29.8% in 2021 and 28.7% in 2022.

According to Amazon CEO Andy Jassy, the core reason behind these changes is cost optimization for customers, but they are more optimistic about the future: "New technologies are attracting more new customers, and we've been providing our customers with all of the great solutions in generative AI and big language models and machine learning solutions. We are optimistic that these are continuing to attract new customers."

Generative AI is becoming an important part of AWS's current efforts to solidify its position. According to Andy Jassy, "AWS is continuing to solidify its leadership position in the cloud with a series of generative AI releases, competing with the likes of Google and Microsoft."

At the compute layer, AWS started developing its own custom AI chips for training and inference a few years ago, and according to Andy Jassy, "We're optimistic that in the future, training and inference for large-scale language models will run on AWS' TrAInium and Inferentia chips."

AWS launched Amazon Bedrock, a fully hosted generative AI service, and Amazon Titan, its own basic large-scale model, in April of this year. among them, the Amazon Titan family of models is divided into two kinds, one is a text model similar to the GPT-4 content generation, and the other is an embedding model that can efficiently create vector embeddings, which are used to create search functions and so on.

Amazon Bedrock is a new platform that integrates the industry's most mainstream basic big models, developers can integrate with AWS services to simplify the development process, AWS also customized chips for model training and inference, which can reduce the cost of developers.

Currently, Amazon Bedrock has access to mainstream basic models such as AI21 Labs, Anthropic, Stability AI, and Amazon Titan, which can be accessed by enterprises through the form of APIs, and has accumulated hundreds of customer cases.In June, AWS announced that it has partnered with the UAE's Institute of Science, Technology and Innovation (TII) to help its training of the open source big language model Falcon40B.

Andy Jassy revealed that organizations such as Bridgewater Associates, Coda, Lonely Planet, Omnicom, 3M, RyanAIr, Showpad, and Travelers are currently using Amazon Bedrock to create generative AI apps.Bedrock has also introduced new features, including new models for Cohere, Anthropic's Claude 2, and Stability AI's Stable Diffusion XL 1.0, as well as an agent for Amazon Bedrock, in addition to AWS offering the code assistant Amazon CodeWhisperer.

Meanwhile, AWS is accelerating its recruiting efforts. In March this year, the company announced that it would invest $ 100 million to set up a generative AI innovation center, and also launched the "Amazon Cloud Technology Startup Accelerator" focusing on startups in the field of AI.

According to Andy Jassy, "Generative AI will undoubtedly change the experience of almost all customers. But it's still early days, most companies are still thinking about how to get there, and I think we're at a very early stage, it's a marathon."

He also mentioned that the continued investment in the direction of the big language model is important for what may affect the company's overall cost investment: "The more customers demand, the more capital AWS invests up front in building data centers and hardware, and then it takes a long period of time after that to make money. We're hoping for that, and have made a reasonable estimate of capital expenditures."

2.AI drives high growth rate of Google's cloud revenue but does not disclose specific figures

Microsoft and Google's earnings reports are a week ahead of Amazon's.

The results show that Alphabet's second quarter total revenue of $74.604 billion, compared with $69.685 billion in the same period a year ago, an increase of 7%, excluding the impact of exchange rate changes for a year-on-year increase of 9%; second quarter net profit of $18.368 billion, compared with $16.002 billion in the same period a year ago, an increase of 15%. The overall revenue performance exceeded Wall Street analysts' expectations, leading to a nearly 6% rise in its after-hours stock price.

Google said, "We are very pleased with our second quarter results. We have been emphasizing for some time now that the company's focus will be on revenue growth rather than expense growth, and this quarter was the first time in some time that we achieved those goals."

Looking at the specific performance of the results, the rebound of the advertising business, which had declined in the previous two quarters, the growth of the YouTube business, and the rapid growth of Google's cloud business were the core drivers that supported this positive performance. Among them, search remained the biggest contributor to revenue growth, totaling $31.9 billion, up 6%.

Generative AI is becoming Google's center of gravity at the moment. At this year's 2023 Google I/O developer conference, Google CEO Sundar PichAI said, "With generative AI, we're taking the next step in refactoring all of our core products, including search."

On the integration of generative AI with search products, Pichai mentioned that progress has been ahead of pre-existing expectations. Since the launch of the relevant products, search efficiency has improved significantly, and search latency has also improved significantly. Relevant metrics have been seen to be met in internal testing. "AI search will also become the new way to search. We will continue to be prudent, thoughtful, and proactive in embracing and building another major change in search."

In addition, he mentioned that the current data related to Bard is very encouraging. "Some users code with Bard, exploring new application scenarios for Bard; we have also integrated Google Lens (Google Smart Lens) with Bard. We're all well aware that Google Lens has huge potential for growth, and visual search technology has grown tremendously over the past two years or so."

Google Cloud's second-quarter revenue was $8.031 billion, up about 28 percent year-over-year, making it the highest-growth business segment. Google Cloud reported an operating profit of $395 million for the quarter, about double the $191 million profit in the first quarter, with an operating margin of 5 percent. This is also Google Cloud from the first quarter of 2023, once again realized operating profit from negative to positive. According to Pichai, new AI-based services and products were the biggest contributors to Google Cloud's growth momentum.

Google Cloud consists of three main businesses: the Google Cloud Platform (GCP) service, Google Workspace communication and collaboration tools, and other enterprise services. GCP's growth in the quarter outpaced Google Cloud's overall growth and grew at a faster rate than Google Workspace, whose strong revenue growth was driven by growth in the number of users and average revenue per user.

By business, for Google Cloud Platform (GCP) services, more than 70 percent of next-generation AI unicorn companies are Google Cloud customers, including Cohere, Jasper, Typeface and others.

Google Workspace currently has a customer base of 9 million, which provides a potential opportunity for AI product penetration. More than 750,000 Workspaces use new product features such as Duet AI.

In addition, Google offers the widest range of AI supercomputer options through Google TPUs and advanced NVIDIA GPUs, and recently launched the new A3 AI supercomputer powered by the NVIDIA H100. This enables customers such as AppLovin to realize a price/performance ratio that is nearly 2x better than industry alternatives.

According to Pichai, the new generative AI offering is expanding the overall target market and winning new customers. "Google has now introduced more than 80 models behind vertexAI, Enterprise Search, and Conversational AI, and customers have demonstrated strong demand for these models, growing more than 15x from April to June, with Priceline, Carrefour, Capgemini, HSBC, Cerevel, and other Organizations across all industries are incorporating new AI technologies for industrial practices. ai provides 'up-sell' and 'cross-sell' opportunities for our base product installations."

In addition, Google is expanding its partner ecosystem to train more than 150,000 people on Google Cloud generative AI in collaboration with hundreds of ISVs and SaaS providers such as Box, Salesforce, Snorkel, and the world's largest consulting firms such as Accenture and Deloitte.

"All of the investments the company has made around AI, including DeepMind, the search business, Gemini and more, will be applied to the Google Cloud business in the future as well. We're very excited and excited about what's possible in the future." Pichai said.

1. for the first time, Azure accounted for more than 50 percent of cloud revenue, with Azure AI revenue accounting for 2 percent of that total

This time, the most expected Microsoft cloud in this wave of generative AI opportunities instead did not give too many stunning results.

The earnings report showed that in the second quarter of 2023, Microsoft's revenue was $56.189 billion, an increase of 8% year-on-year; net profit was $20.081 billion, an increase of 20% year-on-year. Revenue performance was lower than Wall Street analysts predicted, and the stock price fell 4% after the plate.

Specifically, the productivity and business process segment, which covers Office Office software, realized revenue of $18.291 billion in the quarter, compared with $16.600 billion in the same period last year, an increase of 10.2%.

Among them, Office commercial products and cloud services revenue grew 12% year-on-year, Office personal products and cloud services revenue grew 3% year-on-year, the number of subscribers to the personal version of 365 increased to 67 million, and Ahold DelhAIze, Deutsche Bank, Novartis, Siemens, and Wells Fargo are using 365 products. Microsoft has rolled out Microsoft 365 Copilot to 600 paying customers following the release of 365 Copilot, including Emirates, General Motors, Goodyear, Lumen and others.

Although, Microsoft introduced multi-modal visual search in Bing Chat, the personal computing business, which encompasses Surface, Xbox hardware, gaming, search and other business segments, continues to decline, with revenues of $13.905 in the quarter, compared to $14.461 billion in the same period last year, a decrease of 3.8% year-on-year. The latest figures are that Bing users have participated in more than 1 billion chats and created more than 750 million images using the Bing Image Builder. Microsoft Edge had its ninth consecutive quarter of market share gains.

Intelligent Cloud is Microsoft's cash cow business, with $23.99 billion in revenue in the second quarter of 2023, up 15 percent year-over-year. Operating profit was $10.526 billion, up 19.5% year-over-year. Intelligent Cloud mainly consists of business segments such as Azure, Enterprise Services, GitHub and Server Products. Among them, the Azure business saw a 27% year-over-year revenue growth within the quarter, a slowdown compared to the 31% growth rate in the previous quarter.

Microsoft Chairman and CEO Satya Nadella mentioned that sales of Azure cloud computing services accounted for more than half of Microsoft's full-year revenues for fiscal year 2023, the first time Azure has accounted for more than half of cloud computing revenues.

Among them, Azure Arc now has 18,000 customers, up 150% year-over-year, with customers such as Carnival Corp.

Azure AI offers the best selection of cutting-edge and open models, including Meta's recently announced support for Llama on Azure and Windows.

Azure AI services revenue grew by about 50 percent and accounted for about 2 percent of Azure's 27 percent revenue - Microsoft was the only vendor to announce AI-specific revenue.Azure OpenAI now has 11,000 enterprise customers, a significant increase from the 4,509 revealed in mid-May. It added an average of 100 customers per day during the quarter.

Microsoft says Azure AI Studio is becoming the tool of choice for this new era of AI development, helping organizations build, fine-tune, evaluate and deploy models. Nearly 90 percent of registered GitHub Copilot users are self-service users, and more than 27,000 organizations (up 2x quarter-over-quarter) have chosen GitHub Copilot for Business to improve developer productivity, including Airbnb, Dell and Scandinavian Airlines. In addition, Copilot in PowerBI combines the power of large-scale language models with an organization's data, and Copilot in PowerPages makes it easier to create secure, low-code business websites.

Satya Nadella mentioned that Microsoft remains focused on three key priorities: helping customers leverage the breadth and depth of the Microsoft Cloud to get the most value out of their investments, continuing to lead the AI platform posture by infusing AI at every layer of the technology stack, and increasing operational leverage.

Satya Nadella emphasized Microsoft's first-mover advantage in generative AI: "Azure didn't lead the industry in terms of scale, but we're leading strongly as number one right now when it comes to these new work facilities of AI. We're seeing customers who use other clouds to do most of their work start using Azure for the first time for some of these new AI workloads."

He also mentioned that the new generative AI technology will likely bring about a change in gross margins: "I expect gross margins to change over time, similar to the evolutionary cycle of cloud computing before, but we think gross margins will improve faster than cloud computing."

Over the past few months, all the tech giants have been jumping on the bandwagon, trying to get a piece of this wave of generative AI opportunity set in motion by big models. Microsoft, Google, and Amazon are among the most enthusiastic players - not only do they hold the cloud computing resources at the bottom core of the Big Model, but they also have their hands on digital products and tools that affect billions of people.

Recently, Microsoft, Google, and Amazon have released their second-quarter earnings reports for the natural year 2023, and AI-related revenues have become the object of focused attention in each of their earnings reports.

However, with the outside world on the high expectations of AI is completely different, AI is currently on the three tech giants revenue impact "minimal". Amazon and Google did not directly disclose AI revenue figures, Microsoft is the only company that clearly disclosed the figures, which Azure AI revenue accounted for only about 2% of Azure revenue, compared with 1% in the previous quarter.

However, all three vendors are coincidentally treating AI as a core strategy for the future and increasing capital investment in AI.

Amazon CEO Andrew R. Jassy said that every business within Amazon is planning to implement generative AI applications, especially in customer service and cost cutting. Amazon plans to invest more than $50 billion in cash by 2023, with a focus on technology investment in AWS.

Google CEO Sundar Pichai said that with generative AI, Google is taking the next step to refactor all of its core products, including search. Google expects the level of investment in technology infrastructure to rise, continuing to grow from the second half of 2023 through 2024, including investments in GPUs and proprietary TPUs, as well as data center capacity expansion.

Microsoft CEO Satya Nadella said AI Copilot will be Microsoft's third growth curve in the long run. To support the growth of Microsoft's cloud and the demand for AI platforms, Microsoft will accelerate its investment in cloud infrastructure, with capital expenditures increasing in each successive quarter throughout the year.

1. Amazon: generative AI is at a very early stage

Amazon shares soared nearly 10% after hours following the release of its Q2 2023 earnings report. Amazon's overall stock price is also up more than 50% so far this year, making it one of the few tech stocks that can continue to move higher.

The investment and application of artificial intelligence is mainly focused on Amazon cloud AWS. the earnings report showed that AWS revenue in the second quarter of this year amounted to $22.14 billion, an increase of 12% year-on-year, and the operating profit amounted to $5.37 billion, accounting for nearly 70% of the total operating profit.

However, the 12% growth rate is the lowest level since 2015. Starting in the first quarter of 2022, its revenue growth rate has fallen to 37% from 40% in the fourth quarter of 2021, and has continued to dip since then, with its revenue growth rate having been declining for six consecutive quarters.

Meanwhile, AWS realized an operating profit of $5.37 billion, a small decline from $5.72 billion in the same period last year, with an operating margin of 24.23%, lower than the operating margin levels of 29.8% in 2021 and 28.7% in 2022.

According to Amazon CEO Andy Jassy, the core reason behind these changes is cost optimization for customers, but they are more optimistic about the future: "New technologies are attracting more new customers, and we've been providing our customers with all of the great solutions in generative AI and big language models and machine learning solutions. We are optimistic that these are continuing to attract new customers."

Generative AI is becoming an important part of AWS's current efforts to solidify its position. According to Andy Jassy, "AWS is continuing to solidify its leadership position in the cloud with a series of generative AI releases, competing with the likes of Google and Microsoft."

At the compute layer, AWS started developing its own custom AI chips for training and inference a few years ago, and according to Andy Jassy, "We're optimistic that in the future, training and inference for large-scale language models will run on AWS' TrAInium and Inferentia chips."

AWS launched Amazon Bedrock, a fully hosted generative AI service, and Amazon Titan, its own basic large-scale model, in April of this year. among them, the Amazon Titan family of models is divided into two kinds, one is a text model similar to the GPT-4 content generation, and the other is an embedding model that can efficiently create vector embeddings, which are used to create search functions and so on.

Amazon Bedrock is a new platform that integrates the industry's most mainstream basic big models, developers can integrate with AWS services to simplify the development process, AWS also customized chips for model training and inference, which can reduce the cost of developers.

Currently, Amazon Bedrock has access to mainstream basic models such as AI21 Labs, Anthropic, Stability AI, and Amazon Titan, which can be accessed by enterprises through the form of APIs, and has accumulated hundreds of customer cases.In June, AWS announced that it has partnered with the UAE's Institute of Science, Technology and Innovation (TII) to help its training of the open source big language model Falcon40B.

Andy Jassy revealed that organizations such as Bridgewater Associates, Coda, Lonely Planet, Omnicom, 3M, RyanAIr, Showpad, and Travelers are currently using Amazon Bedrock to create generative AI apps.Bedrock has also introduced new features, including new models for Cohere, Anthropic's Claude 2, and Stability AI's Stable Diffusion XL 1.0, as well as an agent for Amazon Bedrock, in addition to AWS offering the code assistant Amazon CodeWhisperer.

Meanwhile, AWS is accelerating its recruiting efforts. In March this year, the company announced that it would invest $ 100 million to set up a generative AI innovation center, and also launched the "Amazon Cloud Technology Startup Accelerator" focusing on startups in the field of AI.

According to Andy Jassy, "Generative AI will undoubtedly change the experience of almost all customers. But it's still early days, most companies are still thinking about how to get there, and I think we're at a very early stage, it's a marathon."

He also mentioned that the continued investment in the direction of the big language model is important for what may affect the company's overall cost investment: "The more customers demand, the more capital AWS invests up front in building data centers and hardware, and then it takes a long period of time after that to make money. We're hoping for that, and have made a reasonable estimate of capital expenditures."

2.AI drives high growth rate of Google's cloud revenue but does not disclose specific figures

Microsoft and Google's earnings reports are a week ahead of Amazon's.

The results show that Alphabet's second quarter total revenue of $74.604 billion, compared with $69.685 billion in the same period a year ago, an increase of 7%, excluding the impact of exchange rate changes for a year-on-year increase of 9%; second quarter net profit of $18.368 billion, compared with $16.002 billion in the same period a year ago, an increase of 15%. The overall revenue performance exceeded Wall Street analysts' expectations, leading to a nearly 6% rise in its after-hours stock price.

Google said, "We are very pleased with our second quarter results. We have been emphasizing for some time now that the company's focus will be on revenue growth rather than expense growth, and this quarter was the first time in some time that we achieved those goals."

Looking at the specific performance of the results, the rebound of the advertising business, which had declined in the previous two quarters, the growth of the YouTube business, and the rapid growth of Google's cloud business were the core drivers that supported this positive performance. Among them, search remained the biggest contributor to revenue growth, totaling $31.9 billion, up 6%.

Generative AI is becoming Google's center of gravity at the moment. At this year's 2023 Google I/O developer conference, Google CEO Sundar PichAI said, "With generative AI, we're taking the next step in refactoring all of our core products, including search."

On the integration of generative AI with search products, Pichai mentioned that progress has been ahead of pre-existing expectations. Since the launch of the relevant products, search efficiency has improved significantly, and search latency has also improved significantly. Relevant metrics have been seen to be met in internal testing. "AI search will also become the new way to search. We will continue to be prudent, thoughtful, and proactive in embracing and building another major change in search."

In addition, he mentioned that the current data related to Bard is very encouraging. "Some users code with Bard, exploring new application scenarios for Bard; we have also integrated Google Lens (Google Smart Lens) with Bard. We're all well aware that Google Lens has huge potential for growth, and visual search technology has grown tremendously over the past two years or so."

Google Cloud's second-quarter revenue was $8.031 billion, up about 28 percent year-over-year, making it the highest-growth business segment. Google Cloud reported an operating profit of $395 million for the quarter, about double the $191 million profit in the first quarter, with an operating margin of 5 percent. This is also Google Cloud from the first quarter of 2023, once again realized operating profit from negative to positive. According to Pichai, new AI-based services and products were the biggest contributors to Google Cloud's growth momentum.

Google Cloud consists of three main businesses: the Google Cloud Platform (GCP) service, Google Workspace communication and collaboration tools, and other enterprise services. GCP's growth in the quarter outpaced Google Cloud's overall growth and grew at a faster rate than Google Workspace, whose strong revenue growth was driven by growth in the number of users and average revenue per user.

By business, for Google Cloud Platform (GCP) services, more than 70 percent of next-generation AI unicorn companies are Google Cloud customers, including Cohere, Jasper, Typeface and others.

Google Workspace currently has a customer base of 9 million, which provides a potential opportunity for AI product penetration. More than 750,000 Workspaces use new product features such as Duet AI.

In addition, Google offers the widest range of AI supercomputer options through Google TPUs and advanced NVIDIA GPUs, and recently launched the new A3 AI supercomputer powered by the NVIDIA H100. This enables customers such as AppLovin to realize a price/performance ratio that is nearly 2x better than industry alternatives.

According to Pichai, the new generative AI offering is expanding the overall target market and winning new customers. "Google has now introduced more than 80 models behind vertexAI, Enterprise Search, and Conversational AI, and customers have demonstrated strong demand for these models, growing more than 15x from April to June, with Priceline, Carrefour, Capgemini, HSBC, Cerevel, and other Organizations across all industries are incorporating new AI technologies for industrial practices. ai provides 'up-sell' and 'cross-sell' opportunities for our base product installations."

In addition, Google is expanding its partner ecosystem to train more than 150,000 people on Google Cloud generative AI in collaboration with hundreds of ISVs and SaaS providers such as Box, Salesforce, Snorkel, and the world's largest consulting firms such as Accenture and Deloitte.

"All of the investments the company has made around AI, including DeepMind, the search business, Gemini and more, will be applied to the Google Cloud business in the future as well. We're very excited and excited about what's possible in the future." Pichai said.

1. for the first time, Azure accounted for more than 50 percent of cloud revenue, with Azure AI revenue accounting for 2 percent of that total

This time, the most expected Microsoft cloud in this wave of generative AI opportunities instead did not give too many stunning results.

The earnings report showed that in the second quarter of 2023, Microsoft's revenue was $56.189 billion, an increase of 8% year-on-year; net profit was $20.081 billion, an increase of 20% year-on-year. Revenue performance was lower than Wall Street analysts predicted, and the stock price fell 4% after the plate.

Specifically, the productivity and business process segment, which covers Office Office software, realized revenue of $18.291 billion in the quarter, compared with $16.600 billion in the same period last year, an increase of 10.2%.

Among them, Office commercial products and cloud services revenue grew 12% year-on-year, Office personal products and cloud services revenue grew 3% year-on-year, the number of subscribers to the personal version of 365 increased to 67 million, and Ahold DelhAIze, Deutsche Bank, Novartis, Siemens, and Wells Fargo are using 365 products. Microsoft has rolled out Microsoft 365 Copilot to 600 paying customers following the release of 365 Copilot, including Emirates, General Motors, Goodyear, Lumen and others.

Although, Microsoft introduced multi-modal visual search in Bing Chat, the personal computing business, which encompasses Surface, Xbox hardware, gaming, search and other business segments, continues to decline, with revenues of $13.905 in the quarter, compared to $14.461 billion in the same period last year, a decrease of 3.8% year-on-year. The latest figures are that Bing users have participated in more than 1 billion chats and created more than 750 million images using the Bing Image Builder. Microsoft Edge had its ninth consecutive quarter of market share gains.

Intelligent Cloud is Microsoft's cash cow business, with $23.99 billion in revenue in the second quarter of 2023, up 15 percent year-over-year. Operating profit was $10.526 billion, up 19.5% year-over-year. Intelligent Cloud mainly consists of business segments such as Azure, Enterprise Services, GitHub and Server Products. Among them, the Azure business saw a 27% year-over-year revenue growth within the quarter, a slowdown compared to the 31% growth rate in the previous quarter.

Microsoft Chairman and CEO Satya Nadella mentioned that sales of Azure cloud computing services accounted for more than half of Microsoft's full-year revenues for fiscal year 2023, the first time Azure has accounted for more than half of cloud computing revenues.

Among them, Azure Arc now has 18,000 customers, up 150% year-over-year, with customers such as Carnival Corp.

Azure AI offers the best selection of cutting-edge and open models, including Meta's recently announced support for Llama on Azure and Windows.

Azure AI services revenue grew by about 50 percent and accounted for about 2 percent of Azure's 27 percent revenue - Microsoft was the only vendor to announce AI-specific revenue.Azure OpenAI now has 11,000 enterprise customers, a significant increase from the 4,509 revealed in mid-May. It added an average of 100 customers per day during the quarter.

Microsoft says Azure AI Studio is becoming the tool of choice for this new era of AI development, helping organizations build, fine-tune, evaluate and deploy models. Nearly 90 percent of registered GitHub Copilot users are self-service users, and more than 27,000 organizations (up 2x quarter-over-quarter) have chosen GitHub Copilot for Business to improve developer productivity, including Airbnb, Dell and Scandinavian Airlines. In addition, Copilot in PowerBI combines the power of large-scale language models with an organization's data, and Copilot in PowerPages makes it easier to create secure, low-code business websites.

Satya Nadella mentioned that Microsoft remains focused on three key priorities: helping customers leverage the breadth and depth of the Microsoft Cloud to get the most value out of their investments, continuing to lead the AI platform posture by infusing AI at every layer of the technology stack, and increasing operational leverage.

Satya Nadella emphasized Microsoft's first-mover advantage in generative AI: "Azure didn't lead the industry in terms of scale, but we're leading strongly as number one right now when it comes to these new work facilities of AI. We're seeing customers who use other clouds to do most of their work start using Azure for the first time for some of these new AI workloads."

He also mentioned that the new generative AI technology will likely bring about a change in gross margins: "I expect gross margins to change over time, similar to the evolutionary cycle of cloud computing before, but we think gross margins will improve faster than cloud computing."