Microsoft has kicked off its annual developer conference in Seattle, focusing on turning its significant artificial intelligence (AI) investments into profitable solutions for consumers and enterprises. With thousands of developers in attendance, the tech giant aims to leverage its growing AI ecosystem, especially within its Microsoft 365 suite powered by AI tool Copilot.
Having invested $64 billion in 2024, largely toward expanding data centres to support AI services, Microsoft is now prioritising cost efficiency and strategic AI deployment. CEO Satya Nadella emphasised the company’s goal to optimise AI algorithms, potentially delivering 10 times better performance at the same cost, helping to reduce operational expenses.
Microsoft continues to benefit from strong demand for AI-driven services within its Azure cloud platform, positioning itself as a leader in cloud-based AI solutions. Analysts note that Microsoft is increasingly keeping high-revenue AI processes in-house, rather than relying on external providers like CoreWeave, a “neocloud” offering specialised Nvidia-powered AI infrastructure. These third-party platforms are now being used only when Microsoft requires temporary, high-volume computing bursts.
In a notable strategic shift, Microsoft is reportedly recalibrating its partnership with OpenAI, allowing the AI startup to collaborate with Oracle on the ambitious “Stargate” data centre in Texas. This suggests Microsoft may be positioning itself as a neutral platform provider in the competitive AI landscape.
With its stock soaring over 30% in 2024, Microsoft is defying broader tech market trends, underlining investor confidence in its evolving AI monetisation roadmap. The developer conference is expected to spotlight innovations in AI tools, cloud services, and productivity enhancements as Microsoft continues its push toward scalable, cost-effective AI deployment.
