Microsoft announced Wednesday that it has expanded its cloud and AI infrastructure in Europe and will follow local laws, hours before the company announced better-than-expected earnings. The expansion will allow each country to "fully use these technologies to strengthen their economic competitiveness,

Worry that a slowing economy will derail artificial intelligence-fueled growth this year may take a back seat after Microsoft over-delivered in its latest quarterly earnings report. Related: Surprising GDP report sends stocks on roller coaster ride Microsoft outpaced Wall Street earnings estimates on revenue and profit,

Cloud growth has helped push Microsoft earnings past Wall Street estimates.

Microsoft forecast on Wednesday stronger-than-expected quarterly growth for its cloud-computing business Azure after blowout results in the latest quarter, calming investor worries in an uncertain economy and lifting its shares 7% after hours.

Microsoft on Wednesday said its profits rose 18% for the January-March quarter, driven by its growth in its cloud computing and artificial intelligence business in a turbulent time for the tech sector.

Microsoft CEO Satya Nadella said that 20%-30% of code inside the company's repositories is "written by software," meaning AI.

Microsoft says AI now writes up to 30% of its code, while Meta predicts AI will handle half of Llama development within a year.

Microsoft CEO Satya Nadella told Meta CEO Mark Zuckerberg that a big chunk of the tech giant's code is now written by AI.