While an improving economic landscape played a role, the primary catalyst for Microsoft‘s gains was the rise of artificial intelligence. The year commenced with buzz around ChatGPT, created by OpenAI, which quickly became the fastest-growing consumer application in history. Within two months of its launch, the chatbot attracted 100 million active users.
Microsoft had initially invested $1 billion in OpenAI in 2019, before increasing its stake to $13 billion. The integration of generative AI across Microsoft’s products and services marked the beginning of an AI gold rush.
Copilot Development
These capabilities paved the way for the development of Copilot, a digital assistant designed to enhance productivity across Microsoft’s core programs. Copilot streamlined tasks such as summarizing emails, drafting responses, outlining meetings, searching spreadsheets, creating presentations in PowerPoint, and coding. The success of Copilot saw approximately 40% of Fortune 100 companies participating in Microsoft’s early access program.
In an interview late last year, CFO Amy Hood expressed confidence that the next-generation AI business would be the company’s fastest-growing $10 billion business in history.
Nadella Defends The Partnership
Microsoft Corp CEO Satya Nadella defended the company’s multi-billion-dollar investment in ChatGPT developer OpenAI. He spoke out amid EU and UK probes into potential merger concerns. Speaking at a Bloomberg-organized event at the World Economic Forum in Davos, Nadella emphasized that AI’s recent strides were a result of Microsoft’s risk-taking.
Nadella said: “If we want competition in AI against some of the players who are completely already integrated, I think partnerships is one avenue of, in fact, having competition.”
He added: “I’m sure the regulators will look at it and say, ‘is this a pro-competition partnership or not?’ And to me, I think it’s a no-brainer.”
He underscored the current focus on stability in the partnership. He also expressed confidence in mitigating AI risks during upcoming elections, including those in the US, where Microsoft is headquartered.
Microsoft’s CEO added: “If Microsoft had not taken the highly risky (decision) – and this is now all conventional wisdom – but when we made those investments, when we backed OpenAI, went all in on a particular form of computing that led to all of these breakthroughs, it would have not been what we had.
“And more importantly, the incumbents would have been the winners.”