Microsoft's restructuring of its financial reporting seeks to clarify AI revenue, moving it to the Productivity and Business Processes segment, reflecting management changes.
The company revised fiscal Q1 2025 forecasts, expecting the productivity segment revenue to rise significantly, while the Intelligent Cloud segment is projected to decline.
Investors demand greater transparency in AI investments, a response to ongoing concerns from influential figures like Elliott Management regarding the commercial viability of AI applications.
By segregating AI earnings, Microsoft aims to showcase performance in its AI endeavors, amidst increasing scrutiny from stakeholders regarding the profitability of tech investments.
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