Microsoft Corp. (NASDAQ:MSFT) CEO Satya Nadella said the software giant is entering a "consequential platform shift" driven by AI agents, as its artificial intelligence business surpassed $37 billion in annual recurring revenue and cloud growth remained robust in a record third quarter.

Microsoft Bets Big On ‘Agentic Computing' Era

Nadella outlined Microsoft's long-term strategy centered on what he called the rise of "agentic computing," where AI-powered agents evolve into the dominant workload across the technology ecosystem.

To capitalize on this transition, Microsoft is executing on two core priorities: "building the world's leading cloud & AI infrastructure," and "building high-value agentic systems across core domains, such as productivity, coding, and security."

The growing interest in AI is underscored by comments from Alphabet Inc. CEO Sundar Pichai, who recently stated in a CBS interview that AI represents “the most profound technology yet.”

Expanding Infrastructure And Efficiency

To support AI growth, Microsoft is scaling its infrastructure, adding another gigawatt of capacity and aiming to double its data center footprint within two years.

The tech giant is investing in custom silicon, including its Maia 200 AI accelerator and Cobalt CPU, while integrating hardware from partners like NVIDIA Corp. (NASDAQ:NVDA) and ...