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Microsoft Quarterly Results Saved by Cloud Computing

General view of Microsoft Corporation headquarters at Issy-les-Moulineaux, near Paris, France, April 18, 2016. REUTERS/Charles Platiau/File Photo
General view of Microsoft Corporation headquarters at Issy-les-Moulineaux, near Paris, France, April 18, 2016. REUTERS/Charles Platiau/File Photo
    Asharq A-Awsat
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Microsoft Quarterly Results Saved by Cloud Computing

General view of Microsoft Corporation headquarters at Issy-les-Moulineaux, near Paris, France, April 18, 2016. REUTERS/Charles Platiau/File Photo
General view of Microsoft Corporation headquarters at Issy-les-Moulineaux, near Paris, France, April 18, 2016. REUTERS/Charles Platiau/File Photo

Microsoft on Tuesday said sales slowed and profits slumped in the last quarter of 2022 as a darkening economic outlook pushed it to lay off 10,000 workers.

The Washington state-based tech giant -- owner of LinkedIn, Xbox and Windows -- said overall sales rose just two percent in the October-to-December period, to $52.7 billion, the slowest rise in six years.

Net profit landed at $16.4 billion for the quarter, down 12 percent year-on-year, according to its earnings release.

The results however met, or in some segments exceeded, expectations and Microsoft's share price was up by more than four percent in late trading after the results were announced.

Microsoft chief executive Satya Nadella last week said he was laying off about five percent of the company’s workforce, just days before pumping several billion dollars into OpenAI, the company behind the controversial chatbot ChatGPT.

The job cuts matched similar culls at other tech giants as companies reversed a major hiring spree during the pandemic when demand for tech products exploded, AFP reported.

Nadella has said that ChatGPT, and other artificial intelligence breakthroughs by the OpenAI research company, would be integrated into Microsoft products that include the Windows operating system, Office and the Bing search engine.

Microsoft is also trying to overcome major regulatory hurdles to complete its buyout of video gaming giant Activision Blizzard for $68.7 billion.

US and EU regulators are highly skeptical of the purchase and allege it would give an unfair advantage to Microsoft's Xbox console over rivals like Sony's PlayStation.

The group's quarterly results were eagerly awaited by the market for the closer they offer at cloud computing, which is Microsoft’s biggest business and a bellwether for the larger economy.

The company’s "intelligent cloud" business, which brings together its servers and data analytics services, brought in $21.5 billion in the second quarter of its fiscal year, up 18 percent year-on-year.

The growth of its remote computing platform, Azure, slower than usual at 31 percent, carried the activity.

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Technology

AI Bubble to Be Short-lived, Rebound Stronger, NTT DATA Chief Says

FILE PHOTO: Figurines with computers and smartphones are seen in front of the words "Artificial Intelligence AI" in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Figurines with computers and smartphones are seen in front of the words "Artificial Intelligence AI" in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
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AI Bubble to Be Short-lived, Rebound Stronger, NTT DATA Chief Says

FILE PHOTO: Figurines with computers and smartphones are seen in front of the words "Artificial Intelligence AI" in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
FILE PHOTO: Figurines with computers and smartphones are seen in front of the words "Artificial Intelligence AI" in this illustration taken, February 19, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

A potential artificial intelligence bubble will deflate faster than past tech cycles but give way to an even stronger rebound as corporate adoption catches up with infrastructure spending, the head of Japanese IT company NTT DATA Inc. said.

Despite worries around supply chains, the direction of travel is clear, CEO Abhijit Dubey said in an interview with the Reuters Global Markets Forum.

"There is absolutely no doubt that in the medium- to long-term, AI is a massive secular trend," he said.

"Over the next 12 months, I think we're going to have a bit of a normalization ... It'll be a short-lived bubble, and (AI) will come out of it stronger."

With demand for compute still running ahead of supply, "supply chains are almost spoken for" over the next two to three years, he said. Pricing power is already tilting toward chipmakers and hyperscalers, mirroring their stretched valuations in public markets, he added.

AI has triggered the biggest technological shake-up since the advent of the internet, fueling trillions of dollars of investment and eye-watering equity gains. But it has caused shortages of memory chips, drawn regulatory scrutiny, and created growing unease over the future of work.

Dubey, who is also the firm's chief AI officer, said his company has begun rethinking recruitment strategies as AI reshapes labor markets.

"There will clearly be an impact ... Over a five- to 25-year horizon, there will likely be dislocation," he said. However, he added that NTT DATA continues to hire across locations.

Speakers at the Reuters NEXT conference in New York discussed how AI may upend work and job growth.

AI startup Writer Inc.'s CEO May Habib said customers are focused on slowing headcount growth.

"You close a customer, you get on the phone with the CEO to kick off the project, and it's like, 'Great, how soon can I whack 30% of my team?'," she said.

Still, a PwC survey of the global workforce released in November suggests the reality of generative AI usage has yet to match boardroom expectations.

Daily use of GenAI remains "significantly lower" than widely touted by executives, PwC said, even as workers with AI skills commanded an average wage premium of 56% — more than double last year's figure.

PwC also flagged a widening skills gap, with about half of non-managers reporting access to training resources, compared with roughly three-quarters of senior executives.

Technology

EU Launches Antitrust Probe into Meta over Use of AI in WhatsApp

FILE - Attendees visit the Meta booth at the Game Developers Conference 2023 in San Francisco on March 22, 2023. (AP Photo/Jeff Chiu, File)
FILE - Attendees visit the Meta booth at the Game Developers Conference 2023 in San Francisco on March 22, 2023. (AP Photo/Jeff Chiu, File)
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EU Launches Antitrust Probe into Meta over Use of AI in WhatsApp

FILE - Attendees visit the Meta booth at the Game Developers Conference 2023 in San Francisco on March 22, 2023. (AP Photo/Jeff Chiu, File)
FILE - Attendees visit the Meta booth at the Game Developers Conference 2023 in San Francisco on March 22, 2023. (AP Photo/Jeff Chiu, File)

Brussels has opened a new antitrust investigation into Meta Platforms over its rollout of artificial intelligence features in WhatsApp, the European Commission said on Thursday, reflecting rising scrutiny of Big Tech's use of generative AI.

The move, reported earlier by Reuters and the Financial Times, marks the latest action by European regulators against large technology firms as the bloc seeks to balance support for the sector with efforts to curb its expanding influence.

The European Commission opened the investigation into "Meta's new policy regarding AI providers' access to WhatsApp" after the California-based company integrated its Meta AI system into the messaging service earlier this year.

A WhatsApp spokesperson said that "the claims are baseless", adding that the emergence of chatbots on its platforms "puts a strain on our systems that they were not designed to support".

"Even still, the AI space is highly competitive and people have access to the services of their choice in any number of ways, including app stores, search engines, email services, partnership integrations, and operating systems."

Meta AI, a chatbot and virtual assistant, has been built into WhatsApp's interface since March 2025 across European markets.

Italy's antitrust watchdog opened a parallel investigation in July into allegations that Meta leveraged its market power by integrating an AI tool into WhatsApp. The probe was expanded in November to examine whether Meta further abused its dominance by blocking rival AI chatbots from the messaging platform.

The FT, citing officials, said that the EU probe will be conducted under traditional antitrust rules rather than the EU's Digital Markets Act, the bloc's landmark legislation currently used to scrutinize Amazon and Microsoft's cloud services for potential curbs.

Technology

Nintendo Launches Long-awaited 'Metroid Prime 4' Sci-fi Blaster

The 'Metroid' series's unique look has garnered many fans since it began in 1986. Ina FASSBENDER / AFP/File
The 'Metroid' series's unique look has garnered many fans since it began in 1986. Ina FASSBENDER / AFP/File
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Nintendo Launches Long-awaited 'Metroid Prime 4' Sci-fi Blaster

The 'Metroid' series's unique look has garnered many fans since it began in 1986. Ina FASSBENDER / AFP/File
The 'Metroid' series's unique look has garnered many fans since it began in 1986. Ina FASSBENDER / AFP/File

Fans of Nintendo's "Metroid" science-fiction saga have reason to celebrate Thursday as the latest instalment in the series is released after an eight-year wait and a bumpy road through development.

Drawing loose inspiration from the "Alien" movies since its first title in 1986, the game series has followed the adventures of space bounty hunter Samus Aran in her battle with the extraterrestrial Metroid, said AFP.

Over 15 instalments, the saga evolved from 2D platforming and exploration into a first-person action-adventure format from 2002, when the first "Metroid Prime" appeared on the Gamecube console.

Now "Metroid Prime 4: Beyond" will take players on Switch 1 or 2 to a distant planet they can explore on foot or by motorbike in Samus's distinctive armored suit.

Equipped with an arm-mounted cannon and a suite of psychic powers to overcome different challenges, players must blaze a trail through jungles or deserts as they battle enemies.

In a novelty for this instalment, players can use the Switch 2's detachable controller handset like a computer mouse to look around the environment -- making the game more comfortable for people used to gaming on a PC setup.

Critics have largely welcomed the new game, with a score of 81 out of 100 based on 71 reviews aggregated by the Metacritic website.

That's a relief for Nintendo after its painful and rare decision to restart development from scratch in 2019 -- 18 months after the title's initial unveiling.

The Japanese giant's first take had "not reached the standards we seek", Nintendo development lead Shinya Takahashi said at the time in a YouTube video.

Nintendo instead handed the job to its US-based development house Retro Studios, which created the first three "Metroid Prime" titles.

The years flying under the radar for "Prime 4" meant it joined longed-for future titles like "Half-Life 3" from Valve or "Beyond Good and Evil 2" from Ubisoft among game fans' white whales.