Microsoft is "moving from chatting about AI to using AI everywhere by adding AI to every bit of its tech stack", Nadella said, saying that the tech is helping the firm "win new customers and drive new benefits and productivity gains," he said.

Nadella added that Microsoft expects an AI craze as customers using the firm's AI tech see "work and workflow change".

The boss compared it to the use of the personal computer at work, saying that "it first starts with few people having access" and then "just like PCs became normal at some point after PCs being used by early adopters".

But Microsoft's adventure into the world of AI has not been without trouble.

The New York Times sued ChatGPT-maker OpenAI and Microsoft in a US court last month, claiming that the firms' powerful AI models used millions of articles for training without permission.

Through their AI chatbots, the firms "seek to ride on The Times' huge investment in its journalism by using it to make copycat products without permission or payment", the lawsuit said.

The action, which names Microsoft as a defendant, says the firms should pay "billions of dollars" in damages.

ChatGPT and other big language models (LLMs) "learn" by looking at a massive amount of data often found online.

Microsoft has been adding AI-assisted tools for coding, and other things, to its software and other offers for businesses.

Sales of Copilot started in November. The software can sum up meetings held in Teams for anyone who can't be bothered to attend. Copilot can also write emails, make Word documents, spreadsheet graphs and PowerPoint slides.

Nadella said these recent moves were working and "winning new customers".

Sales of Microsoft's Azure cloud computing offers, which investors keep an eye on, went up 30 per cent year-on-year, better than analysts had guessed.

Overall, profits in the quarter went up 33 per cent year-on-year to £16 billion.

Nadella said that AI would "reset" how information was found and shared.

The plan for AI is also on the mind of Alphabet, the owner of Google and YouTube, which also updated investors on Tuesday.

Alphabet said revenues in the September-December quarter went up 13 per cent year-on-year and reported profits of nearly £15.2 billion, compared with £10 billion last year.

Boss Sundar Pichai said the firm's search, cloud computing and YouTube were also gaining from investments in AI.