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Microsoft’s Acquisition of Activision and Focus on AI Drive Robust Quarterly Earnings

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Microsoft on Tuesday beat analysts’ expectations as its big bet on artificial intelligence paid off, particularly in its Azure cloud computing unit.


The software giant reported revenue of $62 billion, up 18% from a year ago, beating expected profits of $61.1 billion. The Net income increased 33% year over year to $21.9 billion.

CEO Satya Nadella said: “We have moved from talking about AI to applying AI at scale. By bringing AI to every layer of our technology stack, we are gaining new customers and unlocking new benefits in all areas. and boost productivity.”

Microsoft Cloud revenue grew 24% year over year. According to the earnings report, Xbox Content and Services segment revenue increased 61% due to the acquisition of Activision Blizzard. Activision increased the company’s overall revenue by 4%.

Microsoft, which recently overtook Apple to become the world’s most valuable company, last week became the second company in history to have a stock market valuation of $3 trillion.

Microsoft is considered a leading player in the AI ​​space, both through its own efforts and its close relationship with ChatGPT maker OpenAI, of which it is the largest shareholder. In November, Microsoft CEO Satya Nadella played a key role in Sam Altman’s return as CEO of OpenAI after Altman’s shocking firing. Microsoft occupies an observer seat on his OpenAI board.

Jeremy Goldman, Senior Director of Insider Intelligence/eMarketer Briefing, said: “The company’s recent financial performance, which showed an impressive 18% revenue growth in today’s earnings call, is driven by innovation and strategy. “It shows a powerful combination of foresight.” “While peers such as Alphabet and Meta lead the way in his AI industry, Microsoft is solidifying its position as the frontrunner in his AI race.”

Microsoft’s influence over AI development is rapidly expanding, drawing increased scrutiny from regulators and those outside the technology industry. Investors brushed off concerns that the stock would face stronger headwinds as the stock rose 10% over the past month.

The Federal Trade Commission announced last week that it had opened an investigation into the company’s $10 billion investment in OpenAI, as well as its dealings with Google, Amazon, and AI startup Anthropic. Britain’s Competition and Markets Authority is also investigating the deal. European Union regulators said they may launch a similar investigation. The New York Times sued OpenAI and Microsoft in early December, alleging copyright infringement by ChatGPT.

The quarter also marked the first time Microsoft reported revenue with Activision Blizzard, the premier game studio behind hits like Call of Duty and World of Warcraft. Microsoft completed its $69 billion acquisition of the video game maker in October after lengthy back-and-forth with regulators.

Citing job cuts within both companies, Microsoft last week laid off 1,900 employees across its gaming division, including Activision employees and those working on Xbox consoles.

Source: www.theguardian.com

Activision executive explores potential countersuit following dismissal of sexual harassment claim

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Activision Blizzard executives are considering a possible countersuit against California regulators who claimed the gaming giant had a toxic “frat boy” workplace, but only dropped the lawsuit last week, On The Money reported.
The California Department of Civil Rights, which had been investigating the developer of “Call of Duty” and “Candy Crush” since 2021, dropped the explosive allegations on Friday.
“Neither the courts nor independent investigations have established systematic or widespread sexual harassment,” authorities acknowledged in court documents last week.
California’s stunning admissions say there is no evidence that “senior executives ignored, condoned, or condoned a culture of systemic harassment, retaliation, or discrimination,” and that neither Activision’s board of directors nor CEO Bobby Kotick responded to complaints of misconduct. He also admitted that he had not handled the matter inappropriately.
Nevertheless, Activision ended up paying a $54 million settlement to resolve the lawsuit ($47 million of which was earmarked for pay disparity claims).

Activision ended up paying a $54 million settlement, with $47 million of that going toward pay disparity claims. Paola Morongello
This has angered some Activision executives, who are drafting defamation lawsuits against the company.
The agency’s former director, Janet Whipper, was fired by Gavin Newson a year after she sued Activision, accusing Tesla of “racial discrimination,” a claim that was also unsubstantiated, according to court documents. It turned out that there was no such thing.
Other Activision insiders want to simply put this chapter on the back burner, concerned that an appeal would be tantamount to returning to the belly of the beast, insiders said.
Accusations that women were “subjected to constant sexual harassment, including groping” and that management fostered a “sexist culture” were enough to wipe the company’s market capitalization by $20 billion in a few months. Ta.
The case helped spur Activision’s partnership with Microsoft, which won full regulatory approval earlier this year.
Microsoft reportedly pursued a $75 billion deal after seeing the Diablo maker’s stock price plummet.
An Activision spokesperson declined to comment.

Source: nypost.com