Microsoft Hosts Developer Conference as Focus Grows on AI Profits
Microsoft hosts its annual software developer conference in Seattle on Monday, drawing thousands of coders looking to turn the past years of investments into artificial intelligence into profitable products and services for consumers and businesses.
The Redmond, Washington-based software giant, which is an investor and deep strategic partner with ChatGPT creator OpenAI, and has already spent $64 billion this year, much of it on data centers needed for AI-based services such as Copilot used in its popular Microsoft 365 applications.
But there are signs that Microsoft -- whose shares are up more than 30% this year, defying a broader Nasdaq decline -- is reworking its relationship with OpenAI and seeking to become a neutral arms dealer in the AI race, Reuters reported.
Earlier this year, Microsoft allowed OpenAI to branch out and work with Oracle on the massive "Stargate" data center project in Texas.
Meanwhile, CEO Satya Nadella has argued the company can get expenses down, saying that once it settles on an algorithm and begins to optimize it, Microsoft can obtain 10 times better performance for the same computing costs.
Demand for AI services in Microsoft's Azure cloud computing is also continuing to grow.
Thomas Blakey, an equity analyst with Cantor Fitzgerald, said that the company is increasingly keeping revenue-generating AI services inside its own data centers, where it can continue to tweak them for better cost.
It shifting to only using outside data center services such as CoreWeave, which is known as a "neocloud" that focuses on offering AI chips from Nvidia, when Microsoft needs short bursts of extra computing power for specific projects.
"If they have to flex up in some way, they've been consistently saying that they're going to shift away from buying more data centers and dirt and cement and they're going to leave that to the neoclouds," Blakey told Reuters.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Asharq Al-Awsat
18 minutes ago
- Asharq Al-Awsat
Trump, Musk Offer Show of Unity as Tesla CEO Departs Government
US President Donald Trump said on Friday that billionaire Elon Musk will remain a close adviser, after the Tesla CEO ended a chaotic four-month stint leading the administration's sweeping cost-cutting campaign. During a farewell event in the Oval Office, Trump lauded Musk's work as the head of the Department of Government Efficiency, which has eliminated thousands of jobs and canceled billions of dollars in spending - including the majority of US foreign aid - but has so far fallen short of Musk's lofty initial promises. "Elon is really not leaving. He's going to be back and forth," Trump said from behind the Resolute Desk, as Musk stood to his right, wearing a black DOGE hat and a T-shirt that read "The Dogefather" in the style of the movie "The Godfather." Musk announced this week he would be departing the administration at the end of his 130-day mandate as a special government employee, which was set to expire around May 30. The world's richest man - who spent nearly $300 million in 2024 to help Trump and other Republicans get elected - exerted enormous power during the first few weeks of Trump's term. DOGE upended the federal bureaucracy, dismantling agencies, shutting down long-standing programs and issuing sweeping mandates with little warning, resulting in tens of thousands of layoffs. But his influence at the White House appeared to wane amid complaints from cabinet members about his approach. At the same time, he faced mounting pressure from shareholders worried that his expanding political role was becoming a liability for his companies. Widespread anti-Musk protests at Tesla outlets across the US and Europe contributed to declining sales and a drop in the company's stock price. Other ventures in his sprawling empire, including SpaceX and Starlink, were expected to benefit but also came under scrutiny from his close ties to Trump. Friday's White House event was intended as a show of unity after Musk prompted frustration among White House officials this week by criticizing Trump's sweeping tax and spending bill as too expensive. Some senior aides, including Deputy Chief of Staff Stephen Miller and Chief of Staff Susie Wiles, saw Musk's remarks on the tax bill as an open break from the administration, with Miller particularly irked by the comments, a source familiar with the matter said. According to Reuters, Trump presented Musk with a large golden key inside a wooden box bearing his signature, a gift he said he reserved only for "very special people." "He had to go through the slings and arrows, which is a shame because he's an incredible patriot," Trump said. Musk, in turn, admired the gold finishings that Trump has installed around the Oval Office and explained away a bruised eye by saying his 5-year-old son had punched him in the face while the two were playing around. In addition to saying he would direct more of his energy toward his businesses, Musk has also said he plans to ratchet back his political donations. On Friday, he told reporters he would remain part of Trump's circle of advisers. "I expect to remain a friend and an adviser, and certainly, if there's anything the president wants me to do, I'm at the president's service," he said. CUTS FALL SHORT Musk initially claimed DOGE would slash at least $2 trillion in federal spending. DOGE now estimates it has saved $175 billion, but the details posted on its website, where it gives the only public accounting of those changes, add up to less than half of that figure. US Treasury summaries reviewed by Reuters show that the agencies targeted by DOGE have cut about $19 billion in combined spending compared to the same period last year, far below Musk's original target and amounting to just about 0.5% of total federal expenditures. Trump and DOGE have managed to cut nearly 12%, or 260,000, of the 2.3 million-strong federal civilian workforce largely through threats of firings, buyouts and early retirement offers, a Reuters review of agency departures found. Musk said on Friday that downsizing the government had proven more difficult than he expected, blaming what he called the "banal evil of bureaucracy." Even so, he expressed confidence that DOGE would eventually achieve much deeper savings. "This is not the end of DOGE but really the beginning," he said.
Al Arabiya
33 minutes ago
- Al Arabiya
Trump says he will double steel, aluminum tariffs to 50%
US President Donald Trump said Friday that he would double tariffs on steel and aluminum imports to 50 percent starting next week, the latest salvo in his trade war aimed at protecting domestic industries. 'We're going to bring it from 25 percent to 50 percent, the tariffs on steel into the United States of America,' he said while addressing workers at a US Steel plant in Pennsylvania. 'Nobody's going to get around that,' he added in a speech before blue-collar workers in the battleground state that helped deliver his election victory last year. Shortly after, Trump wrote on Truth Social that the elevated rate would also apply to aluminum, with the new tariffs 'effective Wednesday, June 4th.' Since returning to the presidency in January, Trump has imposed sweeping tariffs on allies and adversaries alike, in moves that have rocked the global trade order and roiled financial markets. The tariffs saw a brief legal setback earlier this week when a court ruled Trump had overstepped his authority, but an appellate court on Thursday said they could remain in effect while litigation continues. Trump has also issued sector-specific levies on goods such as automobiles. On Friday, he defended his trade policies, arguing that tariffs help protect US industry. He said the steel facility where he was speaking would not exist if not for his earlier metals duties. 'Devil in the details' Trump also touted a planned partnership between US Steel and Japan's Nippon Steel, though he offered few new details on the deal, which has faced bipartisan opposition. He emphasized that 'US Steel will continue to be controlled by the USA,' and said there would be no layoffs or outsourcing of jobs. Upon returning to Washington later Friday, Trump told reporters he had yet to approve the deal. 'I have to approve the final deal with Nippon, and we haven't seen that final deal yet, but they've made a very big commitment,' he said. Last week, Trump said US Steel would remain headquartered in Pittsburgh and that the arrangement with Nippon would create at least 70,000 jobs and add $14 billion to the US economy. In Pennsylvania, he said Nippon would invest $2.2 billion to boost steel production at the Mon Valley Works–Irvin plant, where he was speaking. Another $7 billion would go toward modernizing steel mills, expanding ore mining, and building facilities in states including Indiana and Minnesota. The proposed $14.9 billion sale of US Steel to Nippon Steel had previously drawn political opposition from both parties. Former president Joe Biden blocked the deal on national security grounds shortly before leaving office. Concerns about the new partnership remain. The United Steelworkers union (USW), which represents thousands of hourly workers at US Steel facilities, said after Trump's speech that it had not participated in discussions involving Nippon Steel and the Trump administration. 'We cannot speculate about the meaning of the 'planned partnership,'' said USW International President David McCall in a statement. 'Whatever the deal structure, our primary concern remains with the impact that this merger of US Steel into a foreign competitor will have on national security, our members, and the communities where we live and work.' 'The devil is always in the details,' he added. Trump had opposed Nippon Steel's takeover plan during his campaign, but since returning to office, he has signaled openness to some form of investment.
Al Arabiya
33 minutes ago
- Al Arabiya
Musk vows to stay Trump's ‘friend' in bizarre black-eyed farewell
Billionaire Elon Musk bade farewell to Donald Trump in an extraordinary Oval Office appearance Friday, sporting a black eye, brushing aside drug abuse claims, and vowing to stay a 'friend and advisor' to the US president. As the world's richest person bowed out of his role as Trump's cost-cutter-in-chief, the Republican hailed Musk's 'incredible service' and handed him a golden key to the White House. But Trump insisted that Musk was 'really not leaving' after a turbulent four months in which his Department of Government Efficiency (DOGE) cut tens of thousands of jobs, shuttered whole agencies, and slashed foreign aid. 'He's going to be back and forth,' said Trump, showering praise on the tech tycoon for what he called the 'most sweeping and consequential government reform program in generations.' South African–born Musk, wearing a black T-shirt with the word 'Dogefather' in white lettering and a black DOGE baseball cap, said many of the one trillion dollars in savings he promised would take time to bear fruit. 'I look forward to continuing to be a friend and advisor to the president,' he said. But many people were more interested in the livid black bruise around Musk's right eye. Speculation about the cause was further fueled by accusations in The New York Times Friday that Musk used so much of the drug ketamine on the 2024 campaign trail that he developed bladder problems. The SpaceX and Tesla magnate said that his son was to blame for the injury. 'I was just horsing around with lil' X, and I said, 'Go ahead, punch me in the face,'' 53-year-old Musk said. 'And he did. Turns out even a five-year-old punching you in the face actually is...' he added, before tailing off. Musk, however, dodged a question about the drug allegations. The New York Times said Musk, the biggest donor to Trump's 2024 election campaign, also took ecstasy and psychoactive mushrooms and traveled with a pill box last year. Musk, who has long railed against the news media and championed his X social media platform as an alternative, took aim at the paper instead. 'Is that the same publication that got a Pulitzer Prize for false reporting on the Russiagate?' said Musk, referring to claims that Trump's 2016 election campaign colluded with Moscow. 'Let's move on. Okay. Next question.' Later in the day, when a reporter asked Trump if he was 'aware of Elon Musk's regular drug use,' Trump simply responded: 'I wasn't.' 'I think Elon is a fantastic guy,' he added. The White House had earlier played down the report. 'The drugs that we're concerned about are the drugs running across the southern border' from Mexico, said Trump's Deputy Chief of Staff Stephen Miller, whose wife works for Musk. Musk has previously admitted to taking ketamine, saying he was prescribed it to treat a 'negative frame of mind' and suggesting his use of drugs benefited his work. The latest in a series of made-for-TV Oval Office events was aimed at putting a positive spin on Musk's departure. Musk is leaving Trump's administration under a cloud, after admitting disillusionment with his role and criticizing the Republican president's spending plans. It was a far cry from his first few weeks as Trump's chainsaw-brandishing sidekick. At one time Musk was almost inseparable from Trump, glued to his side on Air Force One, Marine One, in the White House, and at Trump's Mar-a-Lago resort in Florida. The right-wing magnate's DOGE led an ideologically driven rampage through the federal government, with its young 'tech bros' slashing tens of thousands of jobs. But DOGE's achievements fell far short of Musk's original goal of saving two trillion dollars. The White House says DOGE has made 170 billion dollars in savings so far. The independent 'Doge Tracker' site has counted just 12 billion, while The Atlantic magazine put it far lower, at two billion. Musk's 'move fast and break things' mantra was also at odds with some of his cabinet colleagues, and he said earlier this week that he was 'disappointed' in Trump's planned mega tax and spending bill as it undermined DOGE's cuts. Musk's companies, meanwhile, have suffered. Tesla shareholders called for him to return to work as sales slumped and protests targeted the electric vehicle maker, while SpaceX had a series of fiery rocket failures.
