WW 918: Casa Chaos - FY25 Q2 earnings, reasoning models, deprecation

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Microsoft reported that it earned a net income of $24.1 billion on revenues of $69.6 billion in the quarter ending December 31, the second quarter of its fiscal 2025. Those figures represent gains of 10 percent and 12 percent year-over-year (YOY), respectively.

Microsoft Earnings Overview

Not much going on with client-side products and services, so a focus on AI
Productivity and Business Processes: $29.4 billion in revenues, up 14 percent YOY. This was 42.2 percent of Microsoft's earnings
Intelligent Cloud: $25.5 billion in revenues, up 19 percent YOY. This was 36.6 percent of Microsoft's earnings
More Personal Computing: $14.7 billion, unchanged from the year-ago quarter. (Literally flat YOY.) This was 21.1 percent of Microsoft's earnings

Windows

Microsoft testing AI-powered search in Windows 11 Dev
New Canary build- Windows Midi Services preview, OneDrive resume, File Explorer folder resume
Microsoft is experimenting with new Windows 11 UIs
Microsoft Edge text rendering comes to all Chromium web browsers on Windows - That only took a few years
Microsoft explains deprecation after using the term for decades

Week 2 of submitting to our new Chinese overlords
Gemini catapults into the lead for a few days as Gemini 2.0 becomes broadly available
Inspired by DeepSeek, OpenAI releases reasoning model to free ChatGPT
This comes after Microsoft added it to Copilot
Reasoning vs. traditional models
Also, DeepSeek R1 is on Azure AI Foundry and GitHub
Sam Altman discusses DeepSeek, more
OpenAI offers up an AI research assistant

More Earnings (Lightning Round)

Intel - $14.3 billion in revenues, down 7 percent
AMD: Revenues up 24 percent, market share gains on Intel
Apple - Record $124.2 billion in revenues, up 4 percent
Alphabet/Google: Revenues at $96.47 billion, up 12 percent - CapEx expenditures closing in on MSFT
Samsung - Revenues up 12 percent to $52.2 billion
Spotify is profitable for full year for the first time

Microsoft 365

Designer makes its way to Photos (Windows) and Microsoft 365 Copilot app (mobile)
Microsoft is removing the VPN from Microsoft 365 Family and Personal
Outlook for Mac to get email recall feature

Xbox

Starfield is coming to Game Pass Standard this month, more Game Pass titles
Forza Horizon 5 is coming to PS5
Two Age of Empires titles are coming to PS5
Remember that Microsoft partnership with Start.gg? Me neither
Nintendo revenues, Switch sales fall more than expected, will no longer beat DS this fiscal year

Tips and Picks

Tip of the week: It's time for an online account audit
App pick of the week: Another week of big browser update
RunAs Radio this week: Entra ID Protection with Corissa Koopmans
Margarita of the week: 2 oz white tequila, 1.5 oz Triple Sec, 1 oz fresh lime juice.

Hosts: Leo Laporte and Paul Thurrott

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