Microsoft CEO: AI Provides ‘On-Ramp’ To Azure Data Services, Copilot Continues To Surge

The Microsoft AI business overall is on track to become the ‘fastest business in our history’ to reach a $10 billion annual revenue run rate, CEO Satya Nadella said during the tech giant’s quarterly call Wednesday.

Microsoft is continuing to generate rapid growth with its portfolio of AI offerings with Copilot seeing strong adoption and Azure AI providing a gateway to a broader set of cloud services including in data and analytics, Microsoft CEO Satya Nadella said Wednesday.

On the whole, “our AI business is on track to surpass an annual revenue run rate of $10 billion next quarter, which will make it the fastest business in our history to reach this milestone,” Nadella said during Microsoft's quarterly earnings call with analysts.

The Microsoft CEO made the comments as the tech giant reported financial results for the first quarter of its fiscal 2025, ended Sept. 30, which saw the company’s revenue climb 16 percent from the same period a year ago to reach $65.59 billion. The results easily surpassed the analyst consensus estimate of $64.51 billion in Microsoft revenue for the quarter.

Microsoft’s stock price slid 3.7 percent to $416.39 a share in after-hours trading Wednesday, however, after the company’s fiscal Q2 guidance fell short of Wall Street expectations.

During the call with analysts, Nadella touted a number of signs of robust AI-related growth, including around Microsoft 365 Copilot and a portfolio of related GenAI applications and tools.

Nearly 70 percent of companies in the Fortune 500 are now using Microsoft 365 Copilot, as customers “continue to adopt it at a faster rate than any other new Microsoft 365 suite,” Nadella said.

In addition to providing its flagship Copilot application, Microsoft also offers the Copilot Studio platform for building custom GenAI copilots, “agents” for automation of business processes and, most recently, “autonomous agents” that can come even closer to offering full autonomy AI.

With this array of GenAI-powered applications and tools, “we have built an end-to-end system for AI business transformation,” Nadella said.

Additionally, the AI opportunity is driving greater adoption of other services on Microsoft’s Azure cloud platform, he said Wednesday.

For instance, “Azure AI is also increasingly an on-ramp to our data and analytics services,” Nadella said.

For example, “as developers build new AI apps on Azure, we have seen an acceleration of Azure Cosmos DB and Azure SQL DB Hyperscale usage,” he said.

Likewise, GitHub Copilot also continues to see widening adoption by developers, with a 55-percent increase in Copilot Enterprise during Microsoft’s fiscal Q1 just from the prior quarter, according to Nadella.

Growth Breakdown

For Microsoft’s Intelligent Cloud business overall, revenue during the quarter rose 21 percent year-over-year to $24.09 billion.

The Productivity and Business Processes business grew 13 percent from the year before to reach $28.32 billion in revenue for the quarter, while the More Personal Computing segment climbed 17 percent to $13.18 billion.

Cybersecurity was another bright spot for the quarter, with Microsoft’s Security Copilot offering now “being used by companies in every industry” and Microsoft continuing “to take share across all major categories we serve” in security, Nadella said.

In addition to leveraging GenAI capabilities in its security tools, Microsoft is also bringing a focus on providing protection for customer AI deployments, as well, he said.

“Customers have used Defender to discover and secure more than 750,000 GenAI app instances and used Purview to audit over 1 billion Copilot interactions to meet their compliance obligations,” Nadella said during the call Wednesday.