Microsoft

Management stated on the April 2025 earnings call that Microsoft's AI business surpassed a $16 billion annual revenue run rate. The Q3 FY2025 10-Q confirms Azure and other cloud services revenue grew 33% YoY, with AI consumption-based services as a driver. Microsoft Cloud revenue reached $42.4 billion for the quarter. Quarterly Ring 1 AI revenue = $16B / 4 = $4.0B. Ring 1 Core AI includes: Azure OpenAI Service (GPT-4, GPT-4o API consumption), Azure AI inference/training compute, GitHub Copilot, and Microsoft 365 Copilot. Ring 2 exclusions: traditional Azure compute, LinkedIn AI features, Dynamics 365 AI features, and AI-enhanced Office productivity tools. The $16B run rate figure likely includes some Ring 2 elements, but dividing an annual run rate by 4 already understates the actual quarterly figure (since the business is growing rapidly and the run rate reflects the exit rate). These effects roughly offset. Math: $4,000M / $70,066M = 5.71%, rounded to 5.7%.