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Microsoft’s cloud computing and artificial intelligence business helped deliver $70.1 billion in sales and boosted profits by 18% for the January-March quarter, a dose of relief for investors during a turbulent time for the tech sector and U.S. economy.The company reported quarterly net income of $25.8 billion, or $3.46 per share, beating Wall Street expectations for earnings of $3.22 a share.The Redmond, Washington-based software maker posted revenue of $70.1 billion in the period, its third fiscal quarter, up 13% from the same period a year ago and also beating Wall Street expectations. Analysts polled by FactSet expected Microsoft to post revenue of $68.44 billion for the quarter.Microsoft CEO Satya Nadella credited cloud growth for its strong quarter. The company’s cloud unit posted revenue of $26.8 billion, compared with expectations of $26.17 billion.“Cloud and AI are the essential inputs for every business to expand output, reduce costs, and accelerate growth,” Nadella said in a statement.The company also saw a 6% increase in revenue in its personal computing unit, which includes its laptop business and Xbox services.Nadella noted on a call with investors that demand for cloud and artificial intelligence remained strong. He said Microsoft is constantly tweaking its investments based on efficiency improvements in computing systems and what kind of services customers want.“We just want to make sure we are accounting for the latest and greatest information,” he said.Microsoft is among a group of the tech industry’s bellwether companies that have been through a period of uncertainty and turmoil since President Donald Trump returned to the White House, with a see-sawing of stocks that has eviscerated trillions of dollars in shareholder wealth amid an onslaught of tariffs and other actions.Microsoft’s stock price has dropped nearly 8% since Trump’s inauguration in January, to about $395 at the close of markets Wednesday. But investors appeared pleased moments later after Microsoft released its earnings report, sending stocks up more than 6% in after-hours trading.Revenue from Microsoft’s cloud computing business segment grew 21%, to $26.8 billion, also beating Wall Street projections.The company felt more tariff uncertainty in its personal computing business, which is centered around its Windows operating system and the fees it collects from computer makers that put it on the hardware they sell. Revenue from that business was $13.4 billion for the quarter, up 6% from the first three months of last year. Associated Press
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E-Commerce
The generative AI revolution has seen more leaps forward than misstepsbut one clear stumble was the sycophantic smothering of OpenAIs 4o large language model (LLM), which the ChatGPT maker eventually had to withdraw after users began worrying it was too unfailingly flattering. The model became so eager to please, it lost authenticity. In their blog post explaining what went wrong, OpenAI described ChatGPTs default personality and its behaviorterms typically reserved for humans, suggesting a degree of anthropomorphization. OpenAI isnt alone in this: humans often describe AI as understanding or knowing things, largely because media coverage has consistently framed it that wayincorrectly. AI doesnt possess knowledge or a brain, and some argue it never will (though that view is disputed). Still, talk of sentience, personality, and humanlike qualities in AI appears to be growing. Last month, OpenAI competitor Anthropicfounded by former OpenAI employeespublished a blog post expressing concern about developing AI that benefits human welfare. But as we build those AI systems, and as they begin to approximate or surpass many human qualities, another question arises, the firm wrote. Should we also be concerned about the potential consciousness and experiences of the models themselves? Should we be concerned about model welfare, too? Why is this kind of language on the rise? Are we witnessing a genuine shift toward AI sentienceor is it simply a strategy to juice a sector already flush with hype? In 2024 alone, private equity and venture capital poured $56 billion into generative AI startups. Anthropomorphization, starting with the interface that presents as a person, using I, is part of the strategy here, says Eerke Boiten, a professor at De Montfort University in Leicester, U.K. It deflects from the moral and technical issues, Boiten says. When I complain that AI systems make mistakes in an unmanageable way, people tell me that humans do, too. In this way, errorslike the misconfiguration of the core prompt that guided ChatGPTs botched 4o modelcan be framed as humanlike mistakes by the model, rather than human errors by its creators. Whether this humanization is a deliberate choice is another question. I think that people actually believe that sentience is possible and is starting to happen, says Margaret Mitchell, a researcher and chief ethics scientist at Hugging Face. Mitchell sees less cynicism than some when it comes to how AI employees and companies talk about sentience and personality. There’s a cognitive dissonance when what you believe as a person clashes with what your company needs you to say you believe, she explains. Within a few years of working at a company, your beliefs as an individual meld with the beliefs that would be useful for you to have for your company. So its not that AI company employees are necessarily trying to overstate their systems capabilitiesthey may genuinely believe what theyre saying, shaped by industry incentives. If sentience pumps up valuation, then the domino effect from thatif you don’t step out of the bubble enoughis believing that the systems are sentient, Mitchell adds. But coding humanlike qualities into AI systems doesnt just exaggerate their abilitiesit can also obscure scrutiny, says Boiten. Dressing up AI systems as humans leads them to make the wrong analogy, he explains. We dont want our tools or calculators to be systemically and unpredictably wrong. To be fair, Anthropics blog post doesnt declare sentient AI inevitable. The word when is balanced by if when considering the moral treatment of AI models. The company also notes, Theres no scientific consensus on whether current or future AI systems could be conscious, or could have experiences that deserve consideration. Even OpenAI CEO Sam Altman, in a January blog post reflecting on the past year, conceded that ubiquitous, superintelligent AI sounds like science fiction right now, and somewhat crazy to talk about. Still, by broaching the subject, AI companies are planting the idea of sentient AI in the public consciousness. The questionone we may never definitively answer unless AI actually becomes sentientis whether this talk makes AI companies and their employees the boy who cried wolf, as former Google engineer Blake Lemoine learned after claiming in 2022 that a model he worked on was sentient. Or are they issuing an early warning? And while such talk may be a savvy fundraising tactic, it might also be worth toleratingat least in part. Preparing mitigation strategies for AIs future capabilities and fueling investor excitement may just be two sides of the same coin. As Boiten, a committed AI sentience skeptic, puts it: The responsibility for a tool is with whoever employs it, and the buck also stops with them if they don’t fully know what the tool actually does.
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E-Commerce
Ideothe global design firm famous for putting Design Thinking into the lexicon of corporate Americahas vastly reduced its staff as appetite for its services have waned. But two years following the culling, the company has hired a new CEO. Michael Peng will take the role in June. Peng is a former Ideo partner who has spent the last five years leading the venture studio Moon Creative Lab, which was founded by the Japanese investment firm Mitsui & Co. His leadership will bring a unique blend of human-centered creativity, multicultural fluency, thoughtful collaboration, and strong business acumen, the company announced in a press release. Meanwhile, Derek Robson, Ideos CEO since 2023 who oversaw the largest staff cuts in the companys history, will be moving into a group-level role at Kyu, the parent organization of Ideo. Before Moon, Peng studied neuroscience as an undergrad at Berkeley, and amassed considerable experience at IDeo, where he led the companys human factors team and was key at shaping its expansion in Japan. During his 14 years with the company, he co-founded the companys Tokyo officea satellite that was profitable for Ideo even as the larger company was losing money in the 2020s. Robson closed Ideo Tokyo in what staffers considered a bungled move to prioritize its venture arm partnership in the region, D4V, which Peng also founded. While it would be premature to deconstruct too much of Ideos strategy with the hire, it is notable that Robson was the first non-designer Ideo had ever hired for the role of CEO. And in hiring Peng, Ideo has put a trained designer back at the helm of the company.
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