Microsoft passes its first test on U.S. tariffs with limited portfolio exposure
Microsoft CEO Satya Nadella speaks during an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025. Microsoft Corp., determined to hold its ground in artificial intelligence, will soon let consumers tailor the Copilot digital assistant to their own needs.
David Ryder | Bloomberg | Getty Images
President Trump’s tariffs have dominated global news headlines for weeks. During Microsoft‘s earnings call with investors on Wednesday, though, tariffs came up only once, during prepared remarks.
The reference from Amy Hood, Microsoft’s finance chief, had to do with sales of personal computers and Windows operating system licenses to other PC makers.
“Windows OEM and devices revenue increased 3% year over year, ahead of expectations, as tariff uncertainty through the quarter resulted in inventory levels that remained elevated,” Hood said.
While Microsoft does sell Surface PCs and Xbox video game consoles, impact will likely be less direct than it will be on companies that sell physical products.
Still, Microsoft does stand to see second-order effects, like other software vendors. Its clients might feel the effects of higher prices on goods imported into the U.S. and choose to soften their spending, and Microsoft does purchase equipment from other countries.
The Redmond, Washington-based company is investing heavily to buy and install the necessary Nvidia graphics processing units across the world to power OpenAI’s ChatGPT and other artificial intelligence products.
If anything, software might help companies respond in the event that their costs go up because of tariffs, CEO Satya Nadella said on the conference call
“I think if you sort of buy into the argument that software is the most malleable resource we have to fight any type of inflationary pressure or any type of growth pressure where you need to do more with less, I think we can be super helpful in that,” he said. “And so if anything, we would probably have more of that mindset is, how do we make sure we are helping our customers, and then, of course, we’ll look to
share gains.”
The company sells a slew of AI products, including the GitHub Copilot that spits out source code suggestions for developers and the Microsoft 365 Copilot assistant that answers questions in Excel, Teams and other productivity apps.
Microsoft shares traded up about 8% in extended trading after the call. The company reported higher revenue and earnings than analysts had predicted and issued an upbeat forecast.
WATCH: Corporate margins will be pressured as a results of tariffs, says Morgan Stanley’s Guerra
A Tesla Inc. robotaxi on Oltorf Street in Austin, Texas, on June 22, 2025.
Tim Goessman | Bloomberg | Getty Images
Tesla has obtained a permit to operate a ride-hailing service in Arizona, the state’s department of transportation said.
The electric vehicle company applied for a “transportation network company” permit on Nov. 13, and was approved on Monday, ADOT said in an emailed statement. Additional permits will be required before Tesla can operate a robotaxi service in Arizona.
In July, Tesla applied to conduct autonomous vehicle testing and operations in Phoenix, with and without human safety drivers on board. A month earlier, Tesla started a robotaxi pilot in Austin, Texas, with safety valets and remote operators. Tesla also operates a more traditional car service in the San Francisco Bay Area.
Tesla didn’t immediately respond to a request for comment.
Tesla plans to take human safety drivers out of its cars in Austin before the end of this year. The company is aiming to operate a commercial robotaxi service in Phoenix and several other U.S. cities before the end of 2026.
According to the National Highway Traffic Safety Administration’s website, Tesla cars equipped with automated driving systems were involved in seven reported collisions following the launch of the company’s pilot in Texas.
Competitors including Alphabet’s Waymo in the U.S. and Baidu’s Apollo Go in China are way ahead in the nascent robotaxi ride-hailing market. In the Phoenix area, Waymo operates a sizable commercial business, with at least 400 autonomous vehicles, the company previously told CNBC. In May, Waymo said it had surpassed 10 million driverless trips served to riders across the U.S.
Baidu said in an earnings update on Tuesday that its Apollo Go service “provided 3.1 million fully driverless operational rides in the third quarter of 2025,” representing year-over-year growth of 212%.
Musk has been promising that Tesla will “solve” autonomy for years without reaching its goals. The world’s richest person has continued with the lofty pronouncements.
At the company’s 2025 shareholder meeting earlier this month, Musk said the “killer app” for self-driving technology is when people can “text and drive,” or “sleep and drive.”
“Before we allow the car to be driven without paying attention, we need to make sure it’s very safe,” Musk said. “We’re on the cusp of that. I know I’ve said that a few times. We really are at this point.”
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