The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Keith Weiss - Morgan Stanley & Co. LLC - Analyst
: And echoing Amy's comments, Brett, congratulations on the new role. It's been a pleasure working with you and best of luck in that
new role.
Looking at the quarter, another really solid quarter when it comes to commercial bookings. But again, we were a little disappointed
on Azure coming in at the bottom end of the guidance range. Amy, I was hoping you could dig into perhaps what some of those
execution issues were, what the resolution of those issues were. And do we still feel comfortable in the acceleration into the back
half of the year that you were talking about after the June quarter and after last quarter?
Question: Mark Moerdler - Sanford C. Bernstein & Co. - Analyst
: Can you give more color on what drove the four larger than expected Microsoft AI revenue. We talked a bit about the Azure AI
component of it. But can you give more color on that? And our estimates are that the Copilot was much bigger than we expected
and growing much faster. Any more details on the breakdown of what that Microsoft AI would be great.
Question: Brent Thill - Jefferies LLC - Analyst
: Satya, you mentioned DeepSeek a couple of times in your prepared remarks. I think everyone would love your thoughts on what
you're seeing there. And are we seeing AI scale now at lower cost? Are we reaching a mark where you can see that? Or do we still
have some time to go?
Question: Karl Keirstead - UBS Securities LLC - Analyst
: Maybe this one as well for Satya, and it's also away from the numbers. But Satya, I wanted to ask you about the Stargate news and
the announced changes in the OpenAI relationship last week. It seems that most of your investors have interpreted this as Microsoft,
for sure, remaining very committed to OpenAI's success. But electing to take more of a backseat in terms of funding OpenAI's future
training CapEx needs. I was hoping you might frame your strategic decision here around Stargate, and Amy, whether there's any
takeaway for investors from that decision in terms of how you're thinking about CapEx needs over the next several years.
Question: Brad Zelnick - Deutsche Bank Securities, Inc. - Analyst
: And I'll echo my congrats and gratitude to Brett as well. Satya, as we think about Microsoft's very rich Copilot portfolio, now having
been in market for over a year, with the products and precision only getting better and the cost of inference coming down, how do
you think about the journey from here and perhaps the ability to package and evolve the go-to-market to address the broadest
range of customers and customer requirements out there.
Question: Brad Reback - Stifel, Nicolaus & Company, Incorporated - Analyst
: That's great. Satya, if you look at several years, any sense of what percent of inference done on Azure will be done on proprietary
models versus open models. And with that said, does it matter to Microsoft at the end of the day?
Question: Brad Sills - BofA Securities, Inc. - Analyst
: Great to hear about the strength you're seeing in copilot. Would love to get some color as to where you're seeing that strength? Is
it departmental deals, customers moving from proof of concept departmental deals, maybe multiple departmental deals in the
enterprise. You mentioned some uptick in usage trends. Would love to get some color on just the common use cases that you're
seeing that give you that confidence that, that will ramp into monetization later.
Question: Brent Bracelin - Piper Sandler & Co. - Analyst
: I wanted to go back to commercial bookings. Commercial RPO, I think, increased 39 billion sequentially. That's the most we've ever
seen on a sequential basis, commercial bookings growth, 75% constant currency. That's 2x higher than we've seen in the last decade.
I appreciate there's some volatility with this metric, but it does feel like this quarter change relative to momentum on backlog and
bookings. Can you just talk about the breadth of where that strength came from? Was it broad-based? Was there a couple of large
deals? Any color there would be helpful.
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