Microsoft Corp. (NASDAQ:MSFT) CEO Satya Nadella said the software giant is entering a "consequential platform shift" driven by AI agents, as its artificial intelligence business surpassed $37 billion in annual recurring revenue and cloud growth remained robust in a record third quarter.
Microsoft Bets Big On ‘Agentic Computing' Era
Nadella outlined Microsoft's long-term strategy centered on what he called the rise of "agentic computing," where AI-powered agents evolve into the dominant workload across the technology ecosystem.
To capitalize on this transition, Microsoft is executing on two core priorities: "building the world's leading cloud & AI infrastructure," and "building high-value agentic systems across core domains, such as productivity, coding, and security."
The growing interest in AI is underscored by comments from Alphabet Inc. CEO Sundar Pichai, who recently stated in a CBS interview that AI represents “the most profound technology yet.”
Expanding Infrastructure And Efficiency
To support AI growth, Microsoft is scaling its infrastructure, adding another gigawatt of capacity and aiming to double its data center footprint within two years.
The tech giant is investing in custom silicon, including its Maia 200 AI accelerator and Cobalt CPU, while integrating hardware from partners like NVIDIA Corp. (NASDAQ:NVDA) and Advanced Micro Devices Inc (NASDAQ:AMD). These efforts are yielding efficiency gains, including a 40% improvement in inference throughput across key AI workloads and faster deployment of GPUs.
Foundry, Fabric Drive Enterprise AI Adoption
Microsoft continues to scale its AI platforms, including Foundry and Fabric, which allow enterprises to build and deploy AI applications using multiple models. More than 300 customers are expected to process over one trillion tokens on Foundry this year, with adoption growing steadily.
Fabric, Microsoft's unified data platform, is also seeing strong traction, with tens of thousands of customers using it to connect operational and analytical data for AI-driven insights.
AI Expands Across Developers, Security And Business Apps
Microsoft is integrating AI across its ecosystem, from GitHub Copilot for developers to AI-powered agents in Dynamics 365 and security platforms.
GitHub adoption continues to surge, with nearly 140,000 organizations using the tool, while enterprise subscriptions have nearly tripled year over year. Usage is also doubling month over month.
In cybersecurity, Microsoft is leveraging AI to detect and respond to threats faster, as the gap between vulnerability discovery and exploitation continues to shrink.
Outlook: Positioned For Next Wave Of Computing
Nadella expressed confidence that Microsoft's integrated approach — spanning infrastructure, platforms and applications — positions the company to lead the next wave of technological innovation.
As AI agents become central to computing, Microsoft is aiming to embed itself deeply into how businesses and consumers operate in an increasingly automated world.
Price Action: Microsoft shares slid 1.5% in premarket at the time of writing after falling 1.1% in regular trading on Wednesday.
Benzinga Edge Stock Rankings indicate that MSFT maintains a strong pricing trend in the short term, with a solid Growth score in the 75th percentile and a Quality score in the 93rd percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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