All in on AI
Shares in some of the world's biggest tech companies are hitting new highs. At the same time, they're cutting thousands of jobs. Is it all because of AI?
To artificial intelligence dystopians, January may look a lot like the beginning of the end. The industry’s biggest companies are posting record profits thanks to AI at the very same time as they announce thousands of employees are being severed.
Microsoft and Alphabet reported strong profits on Wednesday local time. Microsoft made $21.9 billion in net profit and Alphabet USD20.7 billion. While the latter still made most of its money off Google-related ad sales, its AI-inclusive Cloud division is increasingly contributing to its bottom line. The same trend is making Microsoft’s enormous Azure cloud division even bigger, while revenue from its AI Copilot service begins to trickle in.
The three months ending on 31 December were the second most profitable in Microsoft’s history, and the most profitable ever for Alphabet. Euphoria around AI helped send both stocks to record highs last week.
And yet.
Earlier this month Alphabet laid off 1000 staff, with CEO Sundar Pichai advising employees that more cuts are likely to come. Last week, Microsoft made 1900 workers in its Xbox division redundant.
