Will Microsoft’s significant gamble on artificial intelligence be profitable?

Could Microsoft’s considerable AI investment be a smart move?

Financial markets tend to approach with caution when companies heavily invest in technologies that may not yield returns for a considerable period, or perhaps not at all. Given the rapid pace of technological advancements, companies can be capricious in their pursuit of the Next Big Thing. What appears to be a certain success today could easily become a major failure tomorrow. History is filled with such instances – consider the initial excitement surrounding virtual reality, which still struggles to find widespread acceptance and profitability.

Fortunately, AI seems less susceptible to a similar fate. The larger the investment, the greater the potential return. Unlike virtual reality, AI has already proven to generate substantial revenue, despite being in its early stages.

In fact, Microsoft’s recent earnings took a hit because the company was unable to meet the high demand for its AI services. During their earnings call, Microsoft CEO Satya Nadella and CFO Amy Hood acknowledged that the company could have increased sales of AI services in the last quarter if their data centers had sufficient capacity to meet the demand.

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AndyC

Andy Curtis is an award-winning security consultant, researcher and public speaker. He has been working in the computer security industry since the early 1990s, having been employed by state and federal government, leading healthcare and banking providers across three continents. He has given talks about computer security for some of the world’s largest companies, worked with law enforcement agencies on investigations into hacking groups, and is a regular voice on TV and radio explaining IT security threats.

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