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Big tech companies Google and Microsoft reported earnings for Tuesday that were even better than what was anticipated. The reason behind their strong performance is the increasing fascination with artificial intelligence, which is getting investors all pumped up and is providing a significant lift to the technology sector.

Just last year, tech firms introduced ChatGPT, an artificial intelligence language system. These companies experienced money-related challenges and had to reduce expenses, leading to a drop in their stock prices following the initial surge caused by the pandemic. However, Microsoft has managed to reverse this trend for the second consecutive time.

They reported record profits and sales, with a net profit of $20.1 billion from April to June, a 20 percent increase compared to the previous year, and higher than anticipated.

Microsoft’s business has expanded mainly because of its cloud services, which use artificial intelligence a lot. Sales from these cloud services have gone up by 21 percent compared to the year before. However, the speed of this increase was a bit slower than the previous three months.

Likewise, Alphabet, the company that owns Google, announced impressive profits that were better than what the market expected. Their income from showing ads online picked up again, and their cloud business also grew. Even now, Google makes most of its money from showing ads online. In the last quarter, this brought them $58.1 billion, which was more than what experts had thought would happen.

Microsoft and Google are putting a lot of money into AI to make their stuff better. Microsoft is in the lead with AI that works with cloud stuff. Google is also doing cool AI things in tech. Even though they’re big on AI, Google still makes most of its money from ads on the internet.

People who invest money are hopeful about AI making Google even more money and helping them find new ways to sell things. Sergey Brin, one of the Google boss people who started the company, is back at the main office to help make more AI stuff. He and Larry Page, the other co-founder, stepped down from active roles in 2019, and Sundar Pichai took over as the CEO of Google.

In general, the strong profits of both Google and Microsoft show how much artificial intelligence is affecting the growth of the technology field and its possibilities for the times ahead.

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