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Home » News » Tech giants Amazon, Microsoft, and Alphabet report soaring earnings fueled by AI investments, ushering in a new era of cloud dominance.

Tech giants Amazon, Microsoft, and Alphabet report soaring earnings fueled by AI investments, ushering in a new era of cloud dominance.

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Microsoft Advertising is doubling down on its integration of artificial intelligence (AI) following a recent restructure that positioned it under the new division of Microsoft AI. This strategic move signifies a pivotal shift toward integrating AI across all operations, not just within advertising but throughout Microsoft.

With a substantial investment in OpenAI, the creators of ChatGPT, Microsoft is at the forefront of generative AI, enabling the creation of realistic text, images, or audio based on brief prompts. This investment underscores Microsoft’s commitment to advancing Copilot and other consumer AI products and research within its newly formed division.

Despite being second to Google in search, Microsoft Advertising continues to expand its omnichannel media solutions. With properties like LinkedIn, Xbox, and the recently acquired Activision Blizzard, as well as the widely-used Edge browser holding about 70% of global PC operating shares, Microsoft Advertising boasts an extensive reach across various platforms.

Furthermore, Microsoft has bolstered its programmatic capabilities through acquisitions like ad tech platform Xandr and e-commerce platform PromoteIQ. These acquisitions enable Microsoft to support the entire advertising funnel, offering options including video, display, native, and search ads.

Through Xandr, Microsoft now provides demand-side and supply-side platforms for streaming services like Netflix, Disney, and Paramount, further solidifying its presence in the digital advertising space.

Nick Seckold, the regional vice president for Asia Pacific at Microsoft Advertising, highlights the transformative impact of generative AI on campaign management. With AI integrated into every aspect of campaign management, advertisers can automate tasks like campaign setup, optimization, and gaining insights, enhancing efficiency and practicality.

Seckold emphasizes the significance of understanding AI’s limitations, referring to it as a ‘copilot’ that assists users rather than controls them. He underscores the importance of prompt engineering, or effectively communicating with AI to achieve desired outcomes.

“Being integrated into Microsoft AI means that AI technology underpins all of MA’s products and services,” says Seckold. “For advertisers using the Microsoft Advertising platform, this integration brings an AI copilot to every aspect of campaign management.”

Seckold envisions AI streamlining processes like data analysis and campaign performance evaluation across multiple platforms, providing valuable insights in seconds.

“While some stocks may be getting ahead of themselves, AI is very much real and not hype,” says Gil Luria, an analyst at D.A. Davidson Companies.

“AI contributed to an acceleration of growth at those companies’ cloud businesses,” says Luria. “These three hyperscalers are seeing significant customer demand and are investing to meet that demand.”

Amazon’s Jassy detailed a plan in his annual letter to shareholders in April on how Amazon would make AI its next big focus. Google CEO Sundar Pichai said on Alphabet’s latest earnings call that the company was well “positioned for the next wave of AI innovation and the opportunity ahead.” Microsoft recently announced it was investing $1.7 billion into expanding cloud services and AI across Indonesia over the next four years.

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