Satya Nadella: Yes, I think it’s going to have a very foundational impact. In fact, you could say the core compute architecture itself changes, everything from power, power density to the data center design, to what used to be the accelerator, now is the sort of the main CPU, so to speak, or the main compute unit. And so, I think in the network, the memory architecture, all of it. So as the core computer architecture changes, I think every workload changes. And so yes, so there is a full, like, take our data layer, the most exciting thing for me in the last year has been to see how our data layer has evolved to be built for AI, right? If you think about Fabric, one of the genius of Fabric is to be able to say, let’s separate out storage from the compute layer.
In compute we’ll have traditional SQL, we’ll have Spark. And by the way, you can have an Azure AI job on top of the same data lake, so to speak, or the lakehouse pattern. And then the business model you can combine all of those different compute. So that’s the type of compute architecture. So it’s sort of a — so that’s just one example. The tool stuff is changing. Office, I mean if you think about what — if I look at Copilot; Copilots extensibility with GPT, Copilot apps to the Copilot stack, that’s another sort of part of what’s happening to the tech stack. So yes, I mean, definitely builds. I mean. I do believe, being in the cloud has been very helpful to build AI. But now, AI is just redefining what it means to have, what the cloud looks like, both at the infrastructure level and the app model.
Kash Rangan: Terrific. Thank you so much.
Brett Iversen: Thanks, Kash. Joe, our next question, please.
Operator: Our next question comes from the line of Karl Keirstead with UBS. Please proceed.
Karl Keirstead: Thank you. I wanted to return to AI, the six point AI lift to Azure is just extraordinary. But I wanted to ask you about your progress in standing up the infrastructure to meet that demand. If you feel like Microsoft is supply GPU-constrained. Is the success you’ve had maybe working through some of the scaling bottlenecks that some of the other cloud infrastructure providers have talked about, a little bit maybe on the infrastructure scaling front might be interesting. Thank you.
Amy Hood: Thanks, Karl. Maybe I’ll start and Satya feel free to add on. I think we feel really good about where we have been in terms of adding capacity. You started to see the acceleration in our capital expense starting almost a year ago, and you’ve seen us scale through that process. And that is going toward as we talked about Servers and also new data center footprints to be able to meet what we see as this demand and really changing demand as we look forward. And so, I do feel like the team has done a very good job. I feel like, primarily obviously, this is being built by us, but we’ve also used third-party capacity to help when we could have that help us in terms of meeting customer demand. And I think looking forward, you’ll tend to C&I guide toward it, accelerated capital expense to continue to be able to add capacity in the coming quarters, given what we see in terms of pipeline.
Brett Iversen: Thanks, Karl. Joe, next question, please.
Operator: Our next question comes from the line of Brad Zelnick with Deutsche Bank. Please proceed.
Brad Zelnick: Great, thank you so much for taking the question. The early market feedback that we’re all hearing on Microsoft 365 copilot is very powerful. Can you provide more granularity on what you’re seeing in terms of adoption trends versus perhaps other new product introductions in the past, what if anything is holding it back, and how much of a priority is it to get it in the hands of customers? To what lengths might you go to incentivize just getting it out in the market? Thank you.
Satya Nadella: No, thank you for the question, Brad. So, a couple of things. In my comments I said increase in relation to our previous suites like, let’s say, E3 or E5. Whatever two months in, it’s definitely much faster than that. And so, from that perspective. It’s exciting to see, I’d say, the demand signal, the deployment signal. I was looking at by tenant, even usage, it’s faster than anything else because it’s easier, right. I mean, it’s sort of — it shows up in your app, if you click on it, like any ribbon thing and it becomes a daily habit. So it in fact, it reminds me a little bit of sort of the back-in-the day of PC adoption, right. It’s kind of — I think it first starts off with few people having access. There are many companies that are doing standard issue, right.
So just like PCs became standard issue at some point after PCs being adopted by early adopters. I think that’s the cycle that at least we expect. In terms of what we’re seeing, it’s actually interesting, If you look at the data we have, summarization, that’s what it’s like number-one, like I’m doing summarization of Teams meetings inside of Teams, during the meeting, after the meeting, word documents summarization, I get something in email on summarizing. So summarization has become a big deal. Drafts, right, you’re drafting emails, drafting documents. So, anytime you want to start something, the blank page thing goes away and you start by prompting and drafting. Chat, to me, the most powerful feature is now you have the most important database in your company, which happens to be the database of your documents and communications.
It is now queryable by natural language in a powerful way, right. I can go and say, what are all the things Amy said, I should be watching out for next quarter and it will come out with great detail. And so Chat, summarization, draft, also by the way, actions. One of the most used thing is, here’s the Word document, go complete, I mean, create a PowerPoint for me. So, those are the stuff that is also beginning. So, I feel like these all become — but fundamentally, what happens is, if you remember the PC adoption cycle, what it did was work artifact and work flow changed, right. You can imagine what forecasting was before excel and email and what it was after. So similarly, you’ll see work and workflow change as people summarize faster, draft regulatory submissions faster.
Chat to get knowledge from your business. And so, those are the things that we are seeing as overall patterns.
Amy Hood: And maybe just to add two points. One of the exciting things as I said for some companies, it’s going to be standard issue like PC, for other companies, they may want to do a land with a smaller group, see the productivity gains and then expand. And so being able to lift some of the seat requirements that we did earlier this month, it’s really going to allow customers to be able to use that approach too. And the other thing I would add, we always talk about in enterprise software, you sell software, then you wait and then it gets deployed, and then after deployment, you want to see usage. And in particular, what we’ve seen and you would expect this, in some ways with Copilot even in the early stages, obviously, deployment happens very quickly.
