Microsoft has been making significant strides in integrating AI into its products, particularly with the launch of new AI-optimized Surface devices and the introduction of the Copilot AI assistant in Windows 11.
Business Models: Microsoft launched the Surface Pro 10 and Surface Laptop 6 for business users, featuring Intel’s latest Core Ultra processors and Neural Processing Units (NPUs) designed to accelerate AI tasks. These devices are described as the first AI PCs built exclusively for business, with dedicated Copilot keys to enhance productivity.
Consumer Models: Consumer versions of these devices, featuring ARM-based Qualcomm Snapdragon X Elite processors, are expected to be released later in 2024. These models will also support advanced AI features and are anticipated to offer significant performance improvements over previous generations.
AI Features:
Neural Processing Units (NPUs): The NPUs in these devices are designed to handle AI workloads efficiently, offloading tasks from the CPU and GPU. This allows for features like live captions, voice focus, auto framing, and background blur in video calls, enhancing the overall user experience.
Copilot Key: Both the Surface Pro 10 and Surface Laptop 6 include a dedicated Copilot key, which provides quick access to AI-driven assistance. This key can launch Windows Search or activate Copilot features, making it easier for users to perform tasks and access information.
Copilot AI in Windows 11
Functionality:
Task Automation: Copilot in Windows 11 can perform various tasks such as turning on dark mode, opening settings, launching File Explorer, and taking screenshots. It can also assist with more complex tasks by providing step-by-step instructions.
Integration with Apps: While Copilot can interact with some Windows apps, its integration is still evolving. For example, it can guide users on how to duplicate slides in PowerPoint but cannot perform the action directly. Future updates are expected to enhance these capabilities.
New Features in Windows 11 Update:
Generative Erase in Photos: This feature allows users to remove unwanted objects from photos using AI, similar to tools available on Google and Samsung devices.
Voice Shortcuts: These enable users to create custom voice commands to automate tasks, improving accessibility and productivity.
Improved Snap Layouts and Widgets: The update includes smarter Snap layouts that remember frequently used apps and improved Widgets that can now integrate content from third-party providers like Google News.
Broader AI Strategy
AI Vision and Future Plans:
Microsoft is positioning itself at the forefront of AI integration across its product ecosystem, from Windows and Surface devices to Microsoft 365 and Azure. The company aims to make AI a core component of its user experience, enhancing productivity and creativity.
Custom AI Chips: Microsoft is developing its own AI chips, codenamed “Athena,” to reduce reliance on Nvidia GPUs and lower costs. These chips are expected to be used internally and potentially made available to Azure customers in the future.
Collaborations and Partnerships:
Nvidia Partnership: Microsoft has expanded its collaboration with Nvidia to integrate advanced AI technologies into Azure and other Microsoft services. This includes the use of Nvidia’s Grace Blackwell Superchip and DGX Cloud for AI model development and deployment.
Conclusion
Microsoft’s recent product launches and updates highlight its commitment to integrating AI into its hardware and software. The new Surface Pro 10 and Surface Laptop 6, equipped with AI-optimized processors and dedicated Copilot keys, represent a significant step towards making AI a seamless part of the user experience. Additionally, the ongoing enhancements to Windows 11’s Copilot and other AI-driven features underscore Microsoft’s broader strategy to lead in the AI space and provide innovative solutions across its product ecosystem.
Major shareholders comprise co-founder Bill Gates, who stepped down from the company’s board in 2020, which is why these shares are no longer publicly reported. In 2019, Gates still owned a stake of 103 million stocks, which accounted for 1.34% of the company’s ownership (worth over $23 billion in January 2023). Other individual shareholders comprise Satya Nadella, the company’s CEO, Brad Smith (former president), Jean-Philippe Courtois (EVP), and Amy Hood (former CFO).
In 2023, on nearly $212 billion in revenue, Microsoft generated over $72 billion in profits. The company had over $111 billion in liquid assets (which can be easily converted into cash).
Microsoft is among the largest companies on earth, with a diversified portfolio. Owned by billionaire Bill Gates, Microsoft acquired other companies like LinkedIn, GitHub, Skype, and more over the years. Today, Microsoft is a tech empire that spans software, social media, gaming, and more.
In 2023, Google’s search advertising machine, generated over 175 billion dollars. Whereas Microsoft’s Bing generated 12.2 billion dollars. Thus, as of 2023, Google’s search advertising machine is over 14x larger than Microsoft’s search advertising machine.
As of 2023-4, Satya Nadella had 800,667, valued at over $300 million at Microsoft’s current market value. Nadella also got a $2.5 million base salary in 2022, plus $39.23 million in stock awards and over $6.4 million in non-stock incentives, for a total of $48.5 million in 2023. Nadella sold hundreds of millions of dollars of Microsoft stocks in the last ten years, making him a centi-millionaire. In 2023, 95% of Nadella’s salary was performance-based, whereas only about 5% comprised a base salary.
Microsoft’s first acquisition in 1987, Forethought, was the developer of a presentation program that would later become PowerPoint. Since then, the company has made an average of six purchases every year, with fourteen of those exceeding the $1 billion mark. Today’s Microsoft business model spans various segments thanks to an acquisition strategy, which saw Microsoft involved in multiple acquisitions.
Microsoft’s mission is to empower every person and every organization on the planet to achieve more. With over $110 billion in revenues in 2018, Office Products and Windows are still the main products. Yet the company also operates in Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and more.
Microsoft has a diversified businessmodel, spanning from Office to gaming (with Xbox), LinkedIn, search (with Bing), and enterprise services (with GitHub). In 2023, Microsoft made almost $212 billion in revenues, of which almost $80 billion came from Server products and cloud services, and almost $49 billion came from Office products and cloud services. Windows generated $21.5 billion, Gaming generated over $15.4 billion, LinkedIn over $15 billion, and search advertising (through Bing) over $12 billion. Enterprise (GitHub) generated $7.7 billion, and devices (PC) generated $5.5 billion.
Founded in 1975 by Bill Gates and Paul Allen, Microsoft is a revolutionary company in the world of personal computing. The company designs and manufactures software, hardware, operating systems, apps, and devices. Indeed, Windows and Microsoft Office are staples in billions of homes worldwide.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time, it also became more hierarchical while maintaining its hybrid approach between functions, engineering groups, and management.
OpenAI is an artificial intelligence research laboratory that transitioned into a for-profit organization in 2019. The corporate structure is organized around two entities: OpenAI, Inc., which is a single-member Delaware LLC controlled by OpenAI non-profit, And OpenAI LP, which is a capped, for-profit organization. The OpenAI LP is governed by the board of OpenAI, Inc (the foundation), which acts as a General Partner. At the same time, Limited Partners comprise employees of the LP, some of the board members, and other investors like Reid Hoffman’s charitable foundation, Khosla Ventures, and Microsoft, the leading investor in the LP.
OpenAI has built the foundational layer of the AI industry. With large generative models like GPT-3 and DALL-E, OpenAI offers API access to businesses that want to develop applications on top of its foundational models while being able to plug these models into their products and customize these models with proprietary data and additional AI features. On the other hand, OpenAI also released ChatGPT, developing around a freemium model. Microsoft also commercializes opener products through its commercial partnership.
OpenAI and Microsoft partnered up from a commercial standpoint. The history of the partnership started in 2016 and consolidated in 2019, with Microsoft investing a billion dollars into the partnership. It’s now taking a leap forward, with Microsoft in talks to put $10 billion into this partnership. Microsoft, through OpenAI, is developing its Azure AI Supercomputer while enhancing its Azure Enterprise Platform and integrating OpenAI’s models into its business and consumer products (GitHub, Office, Bing).
Stability AI is the entity behind Stable Diffusion. Stability makes money from our AI products and from providing AI consulting services to businesses. Stability AI monetizes Stable Diffusion via DreamStudio’s APIs. While it also releases it open-source for anyone to download and use. Stability AI also makes money via enterprise services, where its core development team offers the chance to enterprise customers to service, scale, and customize Stable Diffusion or other large generative models to their needs.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
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