Microsoft reports strong fourth-quarter earnings amid uproar over DeepSeek’s AI

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Microsoft reported its second-quarter earnings for fiscal year 2025 on Wednesday, beating market expectations even as questions over multibillion-dollar spending on artificial intelligence continue to mount, spurred by DeepSeek’s shock to the US stock market just days ago.The tech giant reported earnings per share of $3.23, an increase of 10% on a year earlier, and revenue of $69.6bn, an increase of 12%.Wall Street had expected $3.

11 a share from revenue of $68.9bn.Shares in the company, worth a total of $3.28tn, are up roughly 8% over the past 12 months as it has poured capital investment into AI and plans $80bn on new AI spending this year.Meta has made similar commitments; US tech giants are rushing to gain an edge over their competitors in the AI race.

“We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead,” said Satya Nadella, chairman and chief executive officer of Microsoft.“Already, our AI business has surpassed an annual revenue run rate of $13bn, up 175% year-over-year.”Amy Hood, executive vice-president and chief financial officer at Microsoft, said revenue from its data cloud business was $40.9bn, up 21% year-over-year.“We remain committed to balancing operational discipline with continued investments in our cloud and AI infrastructure,” Hood said.

The company’s earnings report comes in the shadow of a sell-off in AI-exposed companies on Monday when a Chinese company, DeepSeek, said its AI model had achieved similar results to those of US companies at a fraction of the cost.Chipmaker Nvidia lost some $600bn in market capitalization, though it recovered part of that value in the ensuing days of trading.The implications of DeepSeek’s apparent AI cost breakthrough – it claims to have spent mere millions training its model – raises questions over the past year’s $5tn AI-related run-up in the overall market value of the tech giants known as the “magnificent seven” on Wall Street: Meta, Microsoft, Alphabet, Amazon, Apple, Nvidia and Tesla.The gains accounted for much of the S&P 500’s roughly 70% advance over that period, which has slowed as concerns that returns on AI-capital spending, estimated at more than $200bn over the past year with more scheduled for this year, are still elusive.Sign up to TechScapeA weekly dive in to how technology is shaping our livesafter newsletter promotion“2025 is likely to be the most pivotal year on record for the AI revolution on the development side but also on the financial side, as investors expect to get the returns for the trillions of dollars invested over the past two years,” said Thomas Monteiro, senior analyst at Investing.

com, after the results were released.He called Microsoft “the undisputed AI leader on the software side” and “a stable bet” for investors looking to cash in on AI.Microsoft and AI partner OpenAI are investigating whether data output from OpenAI’s technology was obtained in an unauthorized manner by a group linked to DeepSeek, according to Bloomberg.David Sacks, the White House’s AI and crypto czar, told Fox News that it was “possible” that DeepSeek had stolen intellectual property from the United States.In an earnings call after the company results were released, Nadella said DeepSeek had shown “real innovations” and what was taking place was no different in optimization and improvements to AI than in regular computing.

“For a hyperscaler like us, this is all good news,” he told investors,The Microsoft CEO was also asked about the Stargate Project, a joint venture between OpenAI, Oracle and SoftBank that did not include Microsoft, OpenAI’s top investor, announced by Donald Trump last week,He pushed back on a suggestion that Microsoft would now be taking a backseat: “We remain very happy with the partnership with OpenAI,”The day before, OpenAI’s Sam Altman had posted a picture with Nadella, suggesting the alliance between his company and Microsoft was still strong,Altman wrote that the “next phase” of the partnership was “gonna be much better than anyone is ready for”.

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NHS England chief under fire again as MPs ‘exasperated’ by responses

The head of the NHS in England is under fresh fire after a second influential group of MPs in barely 12 hours accused her of lacking the “drive and dynamism” to radically reform the service.The cross-party Commons health and social care committee criticised Amanda Pritchard, the chief executive of NHS England, after taking detailed evidence from her on Wednesday morning.In an unusual move, the health committee issued a statement about Pritchard’s performance, during which MPs were left “exasperated” and visibly frustrated by the vague and rambling answers she and two senior colleagues gave.“Following today’s report by the public accounts committee, this morning’s evidence session was an opportunity for NHS leadership to prove their drive and dynamism,” said Layla Moran, the Liberal Democrat MP who chairs the committee.“Regrettably, we were left disappointed and frustrated

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Ex-supreme court judge says high court signoff for assisted death unnecessary

A former supreme court judge has told MPs that applications for assisted dying should not need high court approval.Lord Sumption told a committee scrutinising the assisted dying bill that the requirement for signoff by a high court judge was “unnecessary and in some respects undesirable”. No other jurisdiction in the world that allows assisted dying has such a requirement, he said.The terminally ill adults (end of life) bill would allow adults in England and Wales with less than six months to live to end their lives, subject to approval by two doctors and a high court judge.Sumption, who served in the UK’s supreme court until 2018, said: “It is not entirely clear what the judge is supposed to do … Is he there to ensure that the two doctors have done their job and the ducks are all in a row, or is he there to form his own view on these matters, completely independently of all those who have given certificates?“If the latter, one is talking about quite a time-consuming process, involving a lot of additional evidence

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Members of London’s Savile Club vote against letting women join

The Savile Club, one of London’s last remaining gentleman’s clubs, has opted to preserve its men-only status, with members voting against reforming the rules to allow women to join.During a heated emergency general meeting on Tuesday evening, about 53% of members present rejected a motion proposing redrafting the club’s regulations in order to permit women to be admitted to the 157-year-old organisation.Members opposed to the admission of women, described the club as a rare place where “men can be themselves without pretension” and said the Savile was “under attack from the woke mind virus”, one attender said. They argued that the “dynamics in the bar and the camaraderie” would be damaged by the arrival of female members.At least five men were understood to have resigned in protest at the outcome

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Jean Willson obituary

My friend Jean Willson, who has died aged 82, was an inspiration to many, especially those who, like her, campaigned and cared for people with learning disabilities.Jean’s younger daughter, Victoria, was born with profound physical and mental disabilities. Aged four, and often screaming for up to 12 hours a day, she was placed in a care home 120 miles away from the family home in Islington, north London. Jean, with other families, campaigned for local provision for Victoria and children with similar issues.After a four-year struggle, which was supported by the organisation Kith & Kids, Islington council opened a small home on an old hospital site and Victoria returned to the borough

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Child poverty predicted to rise in most of UK except Scotland

Child poverty is on course to increase in most of the UK by the end of this parliament, with only Scotland bucking the trend, according to analysis by a poverty charity.Although Labour’s election manifesto committed it to an “ambitious strategy” to reduce child poverty, only in Scotland will rates have fallen by 2029 under current economic projections, the Joseph Rowntree Foundation (JRF) said.Scotland’s relative success – its child poverty rates are projected to be 10 percentage points lower than England’s by 2029 – is attributed by JRF to Holyrood’s more generous child benefits and its plans to scrap the two-child benefit limit.JRF argues that the government will fail to shift the dial on child poverty if it relies on rising economic growth alone to boost low-income family finances, and that it must drive up living standards through changes to the benefits system.“Any credible child poverty strategy must include policies that rebuild the tattered social security system,” said the JRF chief executive, Paul Kissack

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‘Complacent’ health chiefs in England lack drive to transform NHS, say MPs

Plans to radically reform the health service are at risk because senior leaders of both NHS England and the Department of Health and Social Care (DHSC) are “complacent” and lack dynamism, MPs have said.In an excoriating report the public accounts committee (PAC) warns that officials in England have neither the ideas nor the drive to implement the health service transformation required by Keir Starmer and Wes Streeting.The influential cross-party Commons committee did not identify individuals by name. But it reached its conclusions after questioning in November five top-level civil servants including Amanda Pritchard, NHS England’s chief executive, and Sir Chris Wormald, the DHSC’s then permanent secretary, who has since become the new cabinet secretary.“The scale of government’s ambitions is great but senior officials do not seem to have ideas, or the drive, to match the level of change required, despite this being precisely the moment where such thinking is vital,” the PAC said in its report on the health service’s financial sustainability