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Microsoft’s cloud division is the star of its latest earnings report, with AI integration fueling significant growth. Azure revenue surged by 39% year-over-year, pushing cloud revenue above $75 billion for the fiscal year. CEO Satya Nadella highlighted the AI-first architecture and liquid cooling support now present in every Azure region. This performance, despite recent layoffs, contributed to an overall revenue increase of 18% and a 24% jump in net income for Microsoft. The company’s strategic focus on embedding AI across its cloud services appears to be yielding substantial returns. The AI overhaul of Bing has also boosted search and news advertising revenue by 21%. While Xbox hardware sales have declined, Game Pass is proving to be a strong performer, nearing $5 billion in annual revenue. Demonstrating a broader gaming strategy, Microsoft is expanding its titles to rival consoles like PlayStation and Nintendo Switch.