Microsoft Corporation surpassed Wall Street’s expectations for quarterly sales and earnings, driven by robust demand for its cloud computing offerings.

In a year-over-year comparison, total revenue increased by 13% to reach $70.1 billion, outpacing analyst predictions of $68.4 billion. The company’s net income also rose by 18% to $25.8 billion, exceeding the consensus estimate of $24.1 billion.

During the third quarter, revenue from Microsoft’s Azure cloud computing segment grew by 33%, marking an increase from the 31% growth observed in the previous quarter.

CEO Satya Nadella emphasized the critical role of cloud and AI in driving business expansion, cost reduction, and growth acceleration, stating, “From AI infrastructure and platforms to applications, we are innovating across the board to meet our customers’ needs.”

Following the announcement of these results, Microsoft shares surged by 6%, or $23.54, to $418.75 in late trading, recovering from a closing price of $395.26 in New York, alleviating investor worries regarding the substantial funds Microsoft has dedicated to its AI infrastructure.

Revenue within the Intelligent Cloud division, which incorporates the Azure platform, rose by 21% to $26.8 billion.

The Seattle-based Microsoft, co-founded by Bill Gates and Paul Allen in 1975, has committed to investing approximately $80 billion in data centers this financial year to boost its generative AI capabilities.

As an investor in OpenAI, the organization behind ChatGPT, Microsoft has positioned itself as a leader in the commercial AI space, integrating OpenAI’s technologies into products such as Copilot, which offers functionalities like video call summarizations and transcriptions.

These financial results are released amid Microsoft’s assurance that it is prepared to legally challenge any government efforts aimed at disrupting its operations in Europe or limiting access to its cloud technologies for citizens in the region.

As part of its “digital commitments” to Europe, the tech giant pledged to invest “tens of billions” to expand its data centers throughout the UK and 15 other European nations.

Brad Smith, Microsoft’s president, stated the company aims to foster “digital stability” in a time of significant geopolitical uncertainty between the U.S. and Europe.

Among the five digital commitments made, Microsoft plans to increase its cloud computing capacity in Europe by 40% over the next two years, which will involve establishing more than 200 data centers across the continent. This includes its operations in the UK, where Microsoft currently maintains four data centers.

The company will have a new European board of directors, composed entirely of nationals from European countries, to oversee the European data centers, operating within the framework of European law.

As the second-largest cloud storage provider globally, Microsoft generated $105 billion from its Intelligent Cloud unit last year, including the Azure platform, which competes against Amazon AWS and Google Cloud.

This commitment positions Microsoft as a leading U.S. tech company proactively addressing European concerns amid rising trade tensions.

Smith asserted, “We commit to contesting any government order that seeks to shut down or limit Microsoft’s operations and support for Europe from our data centers. We are prepared to utilize all legal channels to challenge such directives.”

While Smith expressed that it is “exceedingly unlikely” the U.S. government would pursue such actions, he acknowledged that access to technology is a significant concern for European leaders.