Microsoft is heavily investing in AI as a key part of its future strategy. AI is poised to revolutionize various industries and computing categories, prompting organizations using ERP and CRM applications to assess their vendors' roles in this transformation. Microsoft is making substantial bets on AI, integrating generative AI, referred to as "copilots," into many of its products. The company's recent investment of over $10 billion in OpenAI is proving to be a highly valuable move.
AI is the next platform shift
Microsoft views AI as the next major platform shift, following the Client/Server era in the 1990s, the growth of the internet from 2000 to 2010, and the rise of Cloud & Mobile since 2011. The emergence of AI is expected to drive significant investments in modern IT by organizations looking to harness its benefits. ChatGPT, for instance, has already garnered massive interest, reaching 100 million users within just three months of its November 2022 launch, surpassing the adoption rates of Facebook, the internet, and even mobile phones.
To stay at the forefront of the AI race, Microsoft is increasing its capital spending substantially. In the last quarter, these expenses surged by 30% to a record $8.9 billion, primarily due to extensive AI investments. Microsoft plans to allocate even more capital in the coming quarters, leveraging its robust average operating margins of 42% on products and services to support its AI initiatives.
Customers love AI
Microsoft CEO Satya Nadella notes that customers are eager to incorporate generative AI into their business operations, with many seeking not only how to apply the next generation of AI, but also how to do it quickly. Azure OpenAI is gaining rapid adoption, with over 11,000 organizations across various sectors, including companies like Ikea, Volvo, and Zurich Insurance, already using it. Mercedes-Benz is also integrating ChatGPT into over 900,000 vehicles in the United States through Azure OpenAI to enhance in-car voice assistants.
Nadella emphasizes that Microsoft's focus isn't on technology for its own sake, but on collaboratively building technology with implementation partners to drive innovation on behalf of customers, enhancing their ability to serve their own customers across global communities, countries, and industries.
If you're seeking a vendor capable of supporting your growth ambitions with cutting-edge AI tools, Microsoft should certainly be on your shortlist.
