Microsoft Corporation today reportedly released its financial results for the second quarter of the fiscal year 2023, which ended on December 31, 2022. According to the report, Microsoft’s revenue for the second quarter was $52.7 billion (currently about 357.306 billion yuan), up 2 percent year-over-year. Net income was $16.4 billion (approximately RMB 111.192 billion), down 12 percent year-over-year. On a non-GAAP basis, net income was $17.4 billion (approximately RMB 117.972 billion), down 7 percent year-over-year.
Following the release of the results, Microsoft CEO Satya Nadella, CFO Amy Hood, Chief Accounting Officer Alice Jolla, and legal counsel Keith Dolliver attended a subsequent earnings call to explain the key points and answer questions from analysts.
The following is a transcript of the conference call.
Morgan Stanley analyst Keith Weiss: I’d like to talk to management in depth about Microsoft’s investment in OpenAI, an artificial intelligence research company. Is there any expansion of the current scope of Microsoft’s partnership with OpenAI as the investment increases? What are the specific areas of collaboration? Also, from an investor’s perspective, what features and services will Microsoft and OpenAI bring to users in addition to the recently announced Azure OpenAI service? What positive impact will this partnership have on other Microsoft products such as Bing?
Satya Nadella: Our partnership with OpenAI began three years ago. Over the past three years, Microsoft has been working closely together because we believe that the wave of AI is overwhelming and that companies can create a lot of value when they catch the “wave. In addition, the AI wave will impact all parts of the technology stack, providing new solutions and creating new opportunities for people. So whenever we think about new opportunities for platforms, AI is the answer. We need to think: How do we fundamentally harness the AI wave? How do we expand the reach of AI? And what can we create with AI? From this perspective, the core of Azure, or cloud computing, is how to effectively combine networking and storage. In a sense, the issues behind this are very complex. Over the last three years or so, Microsoft has worked on training supercomputers and building an inference infrastructure, because once AI is applied to a program, there are inevitably training and inference issues involved. So I think the impact that Azure is having on the industry is far-reaching, and we want to provide much more than just Azure OpenAI services to everyone. We’re looking at how to combine OpenAI with Microsoft’s Azure Synapse analytics service and so on. As of now, our Power Platform already has integration capabilities.
One of the reasons Microsoft is the industry leader in workflow automation today is because of our outstanding AI capabilities. In fact, GitHub and Copilot have become the most AI-rich products in the market. Whether it’s productivity or consumer services, we want to integrate AI into all layers of the Microsoft technology stack. We’re very excited about these ideas. At the same time, we’re also very excited about OpenAI’s ability to innovate. We’re excited by the interest in the Azure OpenAI service that has been launched recently. In short, going forward we’re looking not only at Microsoft’s investment in OpenAI, but also at close business partnerships. Deeper integration of AI across Microsoft products will not only drive innovation, but also help us stay competitive in our industry.