(MENAFN) Both Google's parent company Alphabet and tech giant Microsoft have reported quarterly profits that exceeded expectations, underscoring their robust ability to monetize substantial investments in artificial intelligence (AI). Alphabet's revenues surged past USD80 billion in the first quarter of the year, with net profits reaching USD23.7 billion, marking an impressive annual increase of 57 percent. Notably, Alphabet's cloud platform delivered stellar performance, with operating profits soaring to USD900 million, three times higher than the previous year.
Similarly, Microsoft announced profits totaling approximately USD22 billion for the period spanning January to March, reflecting a significant 20 percent increase from the previous year. The company's Intelligent Cloud platform, encompassing data centers, servers, and remote programs, experienced a notable 26 percent revenue surge, representing the platform's fastest growth rate in two years.
The market closely monitored these quarterly reports for any indications of the returns on investment in generative artificial intelligence made by these tech behemoths. This scrutiny followed Meta's recent disappointing performance, despite doubling its profits, due to increased expenses associated with AI initiatives that are anticipated to take several years to translate into profitability.
During a conference with analysts, Alphabet CEO Sundar Pichai emphasized the company's clear strategies to generate revenue from artificial intelligence through various channels, including advertising, cloud services, and subscription-based models. Pichai's remarks underscore the growing importance of AI in driving revenue growth for tech companies, as they continue to capitalize on AI's transformative potential across multiple sectors.
Overall, the strong quarterly performances of Alphabet and Microsoft serve as a testament to the effectiveness of their AI investments, providing investors and stakeholders with renewed confidence in their long-term sustainability and profitability.
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