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Microsoft Cloud Leader Says Companies Aren’t Holding Off on Cloud Spending As Inflation Mounts

Rebekah Fuller



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Scott Guthrie, executive vice president of cloud and enterprise at Microsoft Corp., speaks during the Microsoft Developers Build Conference in Seattle, Washington, U.S., on Monday, May 7, 2018.
Grant Hindsley | Bloomberg | Getty Images

Despite an uncertain economy with looming fears of a recession, Microsoft

His remarks suggest demand remains strong for cloud computing services that a handful of large technology companies provide to governments, schools, and businesses.

Slower consumer spending is sparking fears that a recession may be on the way. In July and August, retailers such as Dollar Tree and Walmart lowered their profit estimates to reflect consumers becoming more careful with their money because of higher prices for food, gas and other products.

Businesses are slowing spending on some types of software in anticipation.

Cloud software makers UiPathVeeva

But Guthrie said that doesn’t seem to be the case with Azure, Microsoft’s cloud infrastructure service.

“I’ve not seen the current situation cause people to pause cloud,” said Guthrie, executive vice president of Microsoft’s cloud and artificial-intelligence group, in an interview with CNBC.

An energy crisis has broken out across Europe this year following Russia’s invasion of Ukraine, with Russia claiming that sanctions led to pumping issues. The price of gasoline and electricity shot up. Executives responsible for information technology have taken notice.

“Are we seeing people accelerate to the cloud because of the energy crisis? I think the answer is definitely yes,” Guthrie said. “Similar to Covid, I think what we saw with Covid at the beginning, in particular.”

Guthrie said he hasn’t heard companies saying they would slow their use of cloud computing because of the higher energy costs.

“If you think about the current situation in Europe right now, where the energy prices are going up dramatically, if you can reduce your workloads on prem, and you can move it to our cloud quickly, you can reduce the power draw you need, and that translates into real economic savings,” he said.

That’s been a discussion topic among executives at Paris-based health care company SanofiAmazonGoogle

A metric of efficiency called power-usage effectiveness, or PUE — the energy required for a facility divided by the energy used for computing — is very high at Sanofi, while it’s much lower for Azure, Chenaur said. Microsoft’s global PUE number works out to 1.18, according to a recent blog post.

“If anything, I think from a data center migration perspective, the cloud economics are a lot more compelling now than they probably were even in years past, and they were already compelling, you know,” Guthrie said.

Sanofi began a major transition to the cloud 18 months ago, becoming more reliant on cloud-based virtual desktops that contractors and employees could use from any computer after Covid began, Chenaur said. Now Sanofi intends to add Azure resources in five locations around the world, said Hamad Riaz, CEO of Mobiz, a technology services provider working with Sanofi.

“I would say that we are on a quest to lower overall costs in IT, so we can free that money up, so we can develop more drugs and medicines for patients,” he said.

Other companies might look to cloud to deliver more services because of higher demand in a recession. For example, Zoom Video Communicationsmillions of new users who wanted to hold Zoom video calls in 2020.

“I think we are going to see different companies in different geos kind of respond to challenges, and not just the energy crisis, but if you think about supply chain and a lot of the supply chain reconfiguration that’s happening around the world, or when you think about inflation and interest rates,” Guthrie said.

Still, not every company is moving to the cloud as quickly, because many are facing financial difficulties, Guthrie said. CoinbaseSnapShopifytold employees in June that a recession seemed to be starting, and a recession could kick off a new bear market in digital currencies.

Meanwhile, Microsoft’s finance chief, Amy Hood, was more cautious on the company’s earnings call in July. She told analysts to expect Azure growth to slow to 43% in constant currency from 46% in the second quarter. Microsoft is not immune from current economic forces, CEO Satya Nadella said.

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Disgraced Rep. Santos Defiant After Local GOP Officials Call for ‘immediate’ Resignation Over Campaign Lies

Rebekah Fuller



(The press conference is scheduled to start at 11:30 a.m. ET. Please refresh the page if the above video doesn’t start at that time.)

The Nassau County Republican Committee and dozens of local elected GOP officials from New York are making a “major announcement” on Wednesday about freshman Rep. George Santos, R-N.Y. who is under scrutiny by federal and local lawmakers for embellishing key elements of his resume.

The Republican county political committee, which is chaired by Joseph Cairo, said in press release announcing the event that Santos is a “disgraced” member of Congress, but he did not provide details on the upcoming remarks. Santos has been caught embellishing and, at times, outright lying, about his past, including his claims that he worked on Wall Street.

Santos has apologized to anyone “disappointed by resume embellishments,” but he vehemently denies committing any crimes.

Cairo has previously said that Santos has “broken the public trust by making serious misstatements regarding his background, experience and education, among other issues.” As a member of Congress, Santos represents parts of Queens and Nassau County, a region of Long Island in New York. House Republican leadership have been quiet regarding Santos since he’s been sworn into Congress.

“Obviously, he’s addressed some of the concerns that we’ve had. In New York, they’re having a lot of internal conversations too. But at the end of the day, you know, he was seated, nobody objected to him being seated,” House Republican Majority Leader Steve Scalise, R-La., told CNBC on Wednesday after being asked whether Santos will serve his full two-year term.

Santos has said that all he’s guilty of is embellishing his resume and has committed no crimes.

The lies and embellishments he told during the election have also led to scrutiny from prosecutors in the Eastern District of New York who are examining Santos’ finances, including potential irregularities involving financial disclosures and an over $700,000 loan Santos made to his campaign while he was running for Congress during the 2022 midterms, according to NBC News.

The Campaign Legal Center, a nonpartisan campaign finance watchdog, filed an ethics complaint with the Federal Election Commission against Santos on Monday for allegedly violating campaign finance laws. Santos told reporters that he’s done nothing unethical.

Santos’ fundraising efforts during his successful 2022 run was also based, in part, on some of the false claims he’s made about his past. He would suggest to donors that he was Jewish when he was not and falsely told people he worked at Wall Street banks that don’t have any record of his employment. A Santos campaign staffer impersonated as Kevin McCarthy’s chief of staff in order to raise money for the campaign, CNBC and The Washington Times reported.

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Bed Bath & Beyond Jumps 50% to Lead ‘nonsense’ Rally in Meme Stocks; AMC Gains 16%

Rebekah Fuller



In this article


A “Store Closing” banner on a Bed Bath & Beyond store in Farmingdale, New York, on Friday, Jan. 6, 2023.
Johnny Milano | Bloomberg | Getty Images

A group of highly speculative stocks rallied double digits on Wednesday as retail investors pushed meme names up again in the new year following a dismal 2022.

Bed Bath & BeyondGameStopAMC Entertainment

Meme stocks rallying one more time

Stock Short interest % float Wed. Gain % off 52W high Bed Bath & Beyond (BBBY)48.9%60%-89%AMC (AMC)21%15%-78%GameStop (GME)21%8%-62%
Source: FactSet

The rally in Bed Bath & Beyond was initially triggered by news that it would lay off more employees in an attempt to reduce costs and stay in business.

The home goods retailer told employees that it is eliminating the chief transformation officer role, which is held by Anu Gupta, on the same day it reported disappointing fiscal third-quarter results. Bed Bath & Beyond is approaching a potential bankruptcy, as its sales decline and losses grow.

“We don’t love the strength in nonsense stocks like AMC, CVNA, GME, BBBY, PRTY, etc.,” said Adam Crisafulli, founder of Vital Knowledge. “This just means people are blindly chasing.”

During early 2021, a band of retail traders joined forces on social media to bid up a slew of heavily shorted stocks, creating massive short squeezes that inflicted high pain on short sellers. These meme stocks experienced big pullbacks last year when risk sentiment shifted amid aggressive rate hikes. GameStop fell 50% in 2022, while AMC tumbled 75% and Bed Bath & Beyond plunged 82%.

While the short interest in these names has come down from its peak after the jaw-dropping episode, it still remains much higher than average.

About 48% of Bed Bath & Beyond’s float shares are sold short, compared with an average of 5% short interest in a typical U.S. stock, according to S3 Partners. For GameStop, the short interest stands at 21%, down from more than 100% at the height of the meme stock mania in 2021, according to FactSet. AMC has also 21% of shares sold short.

A short squeeze happens when a stock jumps sharply higher, it forces short sellers to buy back shares in order to limit their losses. The short covering tends to fuel the stock’s rally further.

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Crypto Exchange Binance Plans 15%-30% Hiring Spree in 2023 Even As Rivals Slash Jobs

Rebekah Fuller



Zhao Changpeng, founder and chief executive officer of Binance, attends a conference at Porte de Versailles exhibition center in Paris, France June 16, 2022.
Benoit Tessier | Reuters

Binance is planning a hiring spree in 2023, CEO Changpeng Zhao said Wednesday, taking a somewhat contrarian view as crypto firms lay off huge swathes of staff amid continued pressure on coin prices.

Zhao said Binance, the world’s largest cryptocurrency exchange, said the company increased head count in 2022 from 3,000 people to “almost” 8,000.

In 2023, Binance plans to increase the number of staff by between 15% and 30%, Zhao said at the Crypto Finance Conference in St. Moritz, Switzerland.

Rival exchanges have been forced to cut large parts of their workforces after nearly $1.4 trillion was wiped off the crypto market in 2022 and major digital currencies including bitcoinether

In November, Kraken announced it was laying off 30% of staff, and this year Huobi and Coinbasesecond round of job cuts for Coinbase in the last year.

Zhao said Binance needs to get the company “well-organized” ahead of the next crypto bull run and admitted the exchange is “not super efficient.”

“We will continue to build and hopefully we will ramp up again before the next bull market,” Zhao said.

The industry was plagued last year by collapses of major projects, liquidity issues, bankruptcies and the high-profile failure of crypto exchange FTX. Sam Bankman-Fried who founded FTX has been charged with eight criminal counts by U.S. prosecutors, including fraud. He has pleaded not guilty.

Binance had a big role to play in FTX’s collapse. In November, Binance offered to buy FTX’s non-U.S. businesses which were facing liquidity issues but then later backed out of the deal. Zhao said publicly his company was selling its holdings in FTX’s native token, FTT, which exacerbated the collapse of that digital coin, adding to FTX’s downward spiral.

Zhao has said he “did not master plan” the collapse of FTX.

In response to a CNBC question on the sidelines of the CFC St Moritz conference, the Binance CEO said the “actual damage is not that high” on the crypto industry from the FTX collapse. He said FTX “is not a big player, they just make a lot of noise.”

“There’s definitely damage [but] the industry will be fine,” Zhao said.

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