Explore
Settings

Settings

×

Reading Mode

Adjust the reading mode to suit your reading needs.

Font Size

Fix the font size to suit your reading preferences

Language

Select the language of your choice. NewsX reports are available in 11 global languages.
we-woman
Advertisement · Scroll to continue
  • HOME»
  • Tech & Auto»
  • DeepSeek AI Controversy Looms As Microsoft Reports Strong Q4 Earnings

DeepSeek AI Controversy Looms As Microsoft Reports Strong Q4 Earnings

Microsoft reports strong Q2 earnings amid DeepSeek AI controversy, highlighting robust financial performance and ongoing AI investments.

Advertisement · Scroll to continue
DeepSeek AI Controversy Looms As Microsoft Reports Strong Q4 Earnings

As 2025 begins, Microsoft has confirmed a fresh round of job cuts across various departments, citing performance issues as the primary reason for the layoffs.


Microsoft has reported its second-quarter earnings for fiscal year 2025, surpassing market expectations despite growing concerns over its substantial investments in artificial intelligence (AI). The announcement comes in the wake of a significant disruption caused by Chinese AI company DeepSeek, which recently shocked the US stock market.

Advertisement · Scroll to continue

The tech giant reported earnings per share of $3.23, marking a 10% increase from the previous year, and revenue of $69.6 billion, a 12% rise. Wall Street had anticipated earnings of $3.11 per share from revenue of $68.9 billion. Microsoft’s shares, valued at $3.28 trillion, have seen an 8% increase over the past 12 months, driven by substantial capital investments in AI. The company plans to allocate $80 billion to new AI spending this year, mirroring similar commitments from other US tech giants like Meta.

Satya Nadella, Microsoft’s chairman and CEO, highlighted the company’s innovation across its tech stack and its efforts to help customers unlock the full return on investment (ROI) of AI. “Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year,” Nadella stated.

Advertisement · Scroll to continue

Amy Hood, Microsoft’s executive vice-president and CFO, reported that revenue from the company’s data cloud business reached $40.9 billion, a 21% increase year-over-year. “We remain committed to balancing operational discipline with continued investments in our cloud and AI infrastructure,” Hood said.

Microsoft’s earnings report follows a sell-off in AI-exposed companies on Monday, triggered by DeepSeek’s announcement that its AI model achieved results comparable to those of US companies at a fraction of the cost. This revelation led to a significant drop in market capitalization for chipmaker Nvidia, which lost approximately $600 billion, though it recovered part of that value in subsequent trading days.

DeepSeek’s claim of spending mere millions to train its AI model raises questions about the past year’s $5 trillion AI-related surge in the market value of tech giants known as the “magnificent seven” on Wall Street: Meta, Microsoft, Alphabet, Amazon, Apple, Nvidia, and Tesla. These gains accounted for much of the S&P 500’s roughly 70% advance over the period, which has slowed as concerns about returns on AI-capital spending, estimated at over $200 billion in the past year, persist.

Thomas Monteiro, senior analyst at Investing.com, described 2025 as a pivotal year for the AI revolution, both in terms of development and financial returns. He referred to Microsoft as “the undisputed AI leader on the software side” and “a stable bet” for investors seeking to capitalize on AI.

Microsoft and its AI partner OpenAI are investigating whether data output from OpenAI’s technology was obtained unauthorizedly by a group linked to DeepSeek. David Sacks, the White House’s AI and crypto czar, suggested that it was “possible” DeepSeek had stolen intellectual property from the United States.

As Microsoft continues to navigate the complexities of the AI landscape, its strong financial performance underscores the company’s resilience and strategic investments. The ongoing investigations and market dynamics will likely shape the future trajectory of AI development and its impact on the tech industry.

ALSO READ: Nothing Phone (3a) Features Leaked, Indicating Strong Battery And Impressive Selfie Camera

Filed under

DeepSeek microsoft tech

Advertisement · Scroll to continue
Advertisement · Scroll to continue

mail logo

Subscribe to receive the day's headlines from NewsX straight in your inbox