Microsoft and Google revenues surge thanks to demand for cloud computing and AI

In the latest evidence of growing demand for cloud computing services driven by the surge in adoption of artificial intelligence around the world, both Alphabet (Google) and Microsoft reported record revenues for the latest quarter. Together, the pair account for nearly $5 trillion in the global economy.

Microsoft revenue

Microsoft, which has a market capitalization of $2.965 trillion, saw revenue rise to $61.9 billion over the past three months, up 17% year-over-year. The company's operating income rose an impressive 23% to $27.6 billion, and net income reached $21.9 billion, an increase of 20%.

Driving Microsoft's performance was its thriving cloud division, which generated $35.1 billion in revenue, representing 57% of total revenue and posting an impressive 23% year-over-year growth. Artificial intelligence services accounted for 7% of the 31% jump in revenue for Microsoft's Azure cloud computing platform.

“Microsoft Copilot and the Copilot stack are ushering in a new era of AI transformation, driving business performance across all roles and industries.”

Satya Nadella, Microsoft CEO

Alphabet (Google) earnings

During the same three months, Alphabet reported revenue of $80.5 billion, up 15% year-over-year. Of this, Google Cloud accounted for about $9.6 billion - noticeably less compared to Microsoft's cloud business. The company's market capitalization is $1.950 trillion, positioning it as the fourth most valuable company in the world behind Apple and Nvidia.

At Google, cloud computing revenue grew about 28% thanks to strong growth in Google Workspace, where the Alphabet unit offers many artificial intelligence features based on its large Gemini language model.

Google CEO Sundar Pichai compared the revolution in artificial intelligence to the revolution in internet, mobile and voice technologies.

“Our strong first quarter financial results reflect company-wide revenue growth and ongoing efforts to long-term reengineer our cost base.”

Ruth Porat, President and Chief Investment Officer of Google

With both companies achieving record high revenues and continuing on an upward trajectory, it is clear that cloud services and artificial intelligence technologies will continue to play an important role in the development of the global economy.