Microsoft shares rise with AI features a catalyst to growth

Microsoft have announced its shares are up 8.9% as its AI products continue to rise in popularity and boost sales.

The Redmond-based tech giant have exceeded analysts’ estimates thanks to key products to include Microsoft’s cloud computing and Office software businesses. The firm have also cited artificial intelligence products such as popular search engine Bing as the source for increasing sales.

Microsoft and ChatGPT

Microsoft has been thrust into the limelight this year thanks to its partnership with popular AI language model, ChatGPT, embellishing the Bing search engine with its AI technology.

The search function, created by OpenAI, has proved so popular that in March, Microsoft announced Bing had passed the 100 million daily active users milestone thanks to its AI-powered Chat feature. In comparison, Google Search currently has more than 1 billion daily active users.

Chief executive Satya Nadella told investors that the company had more than 2,500 Azure-OpenAI service customers and AI-powered features in a wide array of products.

Microsoft’s Windows business, which depends on PC sales, reported a higher revenue than predicted at $13.3bn while Office software and advertising sales for LinkedIn, also beat analyst expectations with revenue of $17.5bn, according to Refinitiv.

Twitter’s future hanging in the balance

While Microsoft celebrates its significant rise in shares, the future remains uncertain for online social media platform, Twitter, as it faces tough new EU digital rules along with 16 other major names, with big penalties announced for breaches.

It has been reported that Twitter will face the toughest level of scrutiny under a new European Union regulatory regime designed to monitor digital platforms. The company has admitted it is “unprepared” for the new rules.

Twitter is considered a very large online platform under the Digital Services Act, which means it will have to comply with several measures to include publishing an independent audit of its compliance with legislation. The firm has repeatedly warned it is not ready for the new rules, with breaches risking a fine of 6% of global turnover, or a temporary suspension of the service in extreme measures.

The 16 companies which must comply with the new EU rules include big names such as YouTube, Facebook, Instagram, Wikipedia, Snapchat and TikTok.

Why does this matter?

With the current success of Microsoft and its exponential growth in the market, it will be interesting to see how quickly the increase in traffic to Bing continues. With the firm already one tenth of the way towards rivalling Google Search, it may not be long before Bing becomes the go-to for users searching for AI-powered chat features.

Twitter has recently reduced its workforce from 7,500 people to 1,500, and there are growing fears that moderation standards and the platform’s inability to comply with the act could lead to its ultimate downfall. EU commissioner for the internal market, Thierry Breton has told Musk he has “huge work ahead” if he is going to be able to comply with the DSA.

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