OpenAI business brings Microsoft $10 billion in quarterly revenue
Microsoft also reported $7.2 billion owed by OpenAI for past transactions, while its ownership stake in the AI company declined to 24%.
Alphabet revenue misses estimates as cash burn reaches $9.07 billion
Shares fell about 8% in extended trading as advertising revenue fell short of expectations despite Google Cloud's growth.
Alphabet reported third-quarter revenue of $127.6 billion on October 28, below Wall Street expectations, as spending on AI and cloud capacity deepened its negative free cash flow. The Google parent's shares declined about 8% in extended trading.
Free cash flow was negative $9.07 billion, versus analysts' expectations for a figure near break-even, based on LSEG data. That compared with a $5.9 billion cash burn in the preceding quarter.
Advertising was the source of the revenue shortfall. Google's advertising operations generated $82.01 billion, about $1.41 billion below expectations. Analysts had forecast total Alphabet revenue of $128.2 billion, according to LSEG data.
Google Cloud revenue more than doubled to $30.71 billion for the quarter ending September 30, exceeding estimates. The increase was insufficient to offset the advertising shortfall. The cloud business has expanded enterprise commitments through multiyear infrastructure agreements spanning cybersecurity, retail and financial services.
Alphabet also recorded an operating loss of $7.66 billion in its “Alphabet-level activities” category. The company said the expenses in that category were primarily related to AI research and development.