Microsoft Earnings Call Highlights Latest In AI For Search & Ads

During its latest quarterly earnings call, Microsoft highlighted how it is leveraging artificial intelligence to improve search, advertising, and productivity.

Satya Nadella, Microsoft’s CEO, stated that the company is “redefining how people use the internet to search and create” with AI copilot capabilities.

These include GitHub Copilot for developers, Power Platform Copilot for low-code app development, and Dynamics 365 Copilot for business applications.

Microsoft also announced Copilot for Office productivity apps and Teams, generally available in November.

For example, Bing now supports conversational interactions through chat and AI-generated image creation using DALL-E3 integration.

Microsoft is infusing AI across Bing to provide more relevant personalized answers and recommendations.

The company believes this will increase engagement on Bing and its Edge browser, which continues to gain market share.

Microsoft is also expanding Bing AI integration into third-party experiences like Meta’s chat platform. The goal is to broaden Bing’s reach by allowing it to respond to more contexts.

During the earnings call, Microsoft executives explained they are incorporating AI directly into their advertising platforms. This includes Microsoft’s own search and news ads.

Notably, Microsoft sees AI as a critical way to drive monetization for search through more effective ads. By better understanding user intent through AI, Microsoft can improve ad relevance.

Microsoft pointed to early solid adoption of its Azure OpenAI service, which provides access to large AI ******.

The company highlighted OpenAI usage by new Azure customers and digital-first companies looking to build AI solutions. This demonstrates Microsoft’s strategy to leverage AI capabilities to attract developers and workloads to Azure.

While Microsoft plans to ramp up investments in AI, it expects to maintain operating margins stable year-over-year through cost discipline. Microsoft is confident it can gain a share during this new AI wave.

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