Microsoft and Google post double-digit profit increases, boosting support for AI | Technology

The tech giant’s stock price soared after its better-than-expected results.

Google and Microsoft have reported double-digit profit increases, vindicating the tech giants’ heavy investments in artificial intelligence (AI).

Google parent Alphabet and Microsoft reported better-than-expected quarterly results on Thursday, sending their shares up 11% and 4%, respectively, in after-market trading.

Alphabet reported profits of $23.7 billion in the first three months of this year, an increase of 57%.

The Silicon Valley giant also announced its first-ever dividend of $0.20 per share.

Google CEO Sundar Pichai said Gemini, an AI-powered text-to-image conversion model, helped drive the company’s strong revenue.

“With our leadership in AI research and infrastructure, and global product deployment, we are well-positioned for the next wave of AI innovation,” Pichai said.

Microsoft reported a 20% increase in quarterly profit to $21.93 billion.

The strong performance comes after rival Meta Inc., which owns Facebook and Instagram, said on Wednesday that CEO Mark Zuckerberg warned of rising costs from investments in AI. This comes after it lost $200 billion in market capitalization.

The gains come as Google, Microsoft, Amazon and other AI giants are under intense scrutiny from regulators in the U.S. and Europe.

In January, the Federal Trade Commission launched an investigation into whether a multibillion-dollar partnership between Microsoft, Amazon, Google and startups OpenAI and Anthropic stifled competition.

In March, the European Commission launched an investigation into big tech companies’ management of risks related to AI, including computer-generated deepfakes.

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