Microsoft to report fourth-quarter earnings amid uproar over DeepSeek's AI

Core Viewpoint - Microsoft is set to report its second-quarter earnings for fiscal year 2025, with expectations of $3.11 in earnings per share and revenue of $68.9 billion, reflecting significant growth compared to the previous year [1] Group 1: Financial Performance - Wall Street anticipates earnings per share of $3.11 and revenue of $68.9 billion for Microsoft, compared to $2.93 per share and $62 billion in revenue for the same period last year [1] - The company's shares are valued at a total of $3.28 trillion, having increased approximately 8% over the past 12 months [2] Group 2: AI Investment and Competition - Microsoft plans to invest $80 billion in AI this year, continuing its trend of significant capital investment in AI technologies [2] - The company aims to build AI-enabled datacenters to train AI models and deploy AI and cloud-based applications globally [2] Group 3: Market Context and Challenges - The earnings report comes amid a sell-off in AI-exposed companies, triggered by DeepSeek's claims of achieving similar AI results at a lower cost, which impacted Nvidia's market capitalization by approximately $600 billion [3] - DeepSeek's cost-effective AI model raises concerns about the $5 trillion increase in market value of major tech companies over the past year, which has contributed to a 70% advance in the S&P 500 [4] Group 4: Intellectual Property Concerns - Microsoft and OpenAI are investigating potential unauthorized access to OpenAI's data by a group associated with DeepSeek [5] - There are allegations that DeepSeek may have stolen intellectual property from the U.S., with evidence suggesting they distilled knowledge from OpenAI's models [6] Group 5: Partnership Dynamics - Despite recent challenges, the partnership between Microsoft and OpenAI appears strong, with both parties expressing optimism about future developments [7]