Long on Hype, A.I. Is No Guarantee for Profits

A cloudy forecast for Big Tech and A.I.

The Nasdaq composite index appears set to open within the pink on Wednesday, after traders received a split-screen view of how two tech giants, Microsoft and Alphabet, have been doing in efforts to revenue from synthetic intelligence.

The verdict up to now, primarily based on quarterly earnings stories launched on Tuesday: Only certainly one of them is displaying early progress. That raises questions concerning the tech business’s multibillion-dollar wager on the facility of A.I.

Microsoft shares are up 3.9 p.c after exceeding expectations. The firm reported $56.3 billion in gross sales, largely on the power of its Azure cloud enterprise. Some of that progress got here from generative A.I., the place Microsoft has invested huge: It has poured $13 billion into OpenAI, the agency behind ChatGPT, and constructed that expertise into its Bing search engine.

Satya Nadella, Microsoft’s C.E.O., advised analysts that greater than 18,000 organizations have been utilizing Azure OpenAI, together with new clients. (The Information reported on Tuesday that some early OpenAI clients have been switching to cheaper alternate options … together with Microsoft.)