Nadella was emphatic in the earnings press release: “Cloud and AI is the driving force of business transformation across every industry and sector. We’re innovating across the tech stack to help customers adapt and grow in this new era.”
To that point, the company’s Intelligent Cloud segment—home to Azure—generated $29.9 billion in revenue, up a robust 26%. Azure and other cloud services revenue soared 39% for the quarter, while annual Azure revenue surpassed $75 billion, growing 34% year-over-year. Nadella cited major enterprise customers leveraging both traditional and AI-powered workloads on Azure, highlighting that this is no longer just about experimentation—companies are moving quickly to deploy AI at scale.
When asked about the return on investment on this massive spending, Hood responded that Microsoft has $368 billion of contracted backlog across the “breadth of the Microsoft Cloud,” not just Azure. She added that she feels very confident that this spending is “directly tied to business that is already contracted and on the books — and that we need to deliver.”
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
