Microsoft seen leading AI arms race by as much as two years
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Microsoft (NASDAQ:MSFT), Google (GOOG) (GOOGL) and a host of other tech companies are competing against one another in a battle for artificial intelligence prowess that has been compared to Game of Thrones. However, Wedbush Securities believes that Microsoft (MSFT) has a lead over the competition, thanks to its multibillion dollar investment in OpenAI.
"With [Microsoft's] investment into ChatGPT, we believe this was a great first-mover advantage for Microsoft capitalizing on an opportunity that has been brewing for the past few years," analyst Dan Ives wrote in an investor note. Ives said that due to Microsoft's (MSFT) pedigree of properly monetizing its line, "we believe this will be a massive transformation for the company from Bing to Azure."
Much attention has been heaped upon ChatGPT and OpenAI, which recently released its GPT-4 large language model that the company claimed could score higher on the SATs than 90% of test takers.
While Ives noted that OpenAI and ChatGPT likely is ahead of the competitors now, that situation could change as time goes on.
Ives added that the AI battle is likely to play out over the long-term, as other companies beyond Google (GOOG) (GOOGL), including Apple (AAPL), Meta Platforms (META) and others are expected to collectively spend "billions" over the coming years.
When all is said and done, the opportunity for AI in both the enterprise and consumer spaces is likely worth some $800B, Ives explained.
Seeking Alpha Investing Groups Leader Julian Lin laid out some tidbits for investors to know ahead of Microsoft's (MSFT) earnings later this week.
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