On January 12th local time, the US stock market closed with Microsoft's stock price rising by 1%, reaching a market value of $2.887 trillion, surpassing Apple to become the world's largest company by market value and expected to become the next US technology company to enter the $3 trillion club.
Microsoft also held an artificial intelligence event in San Francisco on Thursday, sending a positive signal to the market. Analysts voted in favor of Microsoft's AI product development momentum.
In 2023, Microsoft made crazy bets in the field of artificial intelligence, with the most successful investment being $10 billion in support for OpenAI behind the generative AI tool ChatGPT. Although there was a personnel farce in the latter at the end of last year, it did not affect market confidence in OpenAI.
The market expects OpenAI to receive a new round of financing in the first quarter of this year, which will also push the company's valuation above $100 billion.
The demand for generative artificial intelligence from technology companies is fueling a surge in business for cloud computing giants, with Microsoft being one of the biggest winners. After every release of product news related to artificial intelligence last year, Microsoft's stock price skyrocketed in response. In 2023, the company's cumulative increase was nearly 60%.
Microsoft CFO Amy Hood and Microsoft CTO Kevin Scott previously emphasized that the huge customer demand is driving the rapid growth of Microsoft's next-generation artificial intelligence solutions, positioning it as the company's fastest-growing $10 billion business to date.
Microsoft Cloud's revenue mainly comes from two sources: first, the tools and services used by customers to develop AI applications, utilizing Azure OpenAI API and Azure infrastructure; second, the integration of AI functionality, which integrates the capabilities of generative AI into every Microsoft Cloud solution.
Artificial intelligence has penetrated every aspect of Microsoft's business, and Microsoft has been striving to integrate OpenAI's generative artificial intelligence technology into its production tools. In 2023, Microsoft launched Azure Open AI cloud services for enterprises; Launched the first Windows Copilot PC platform with integrated artificial intelligence support, used in conjunction with the chat model Bing Chat and third-party plugins, allowing users to complete complex projects and collaborations; Microsoft recently announced a new Microsoft 365 artificial intelligence subscription service.
In Microsoft's latest Q1 financial report, its key cloud business contributed over 40% of revenue, reaching $24.3 billion, becoming the biggest driving force for the company's business growth. This is due to the company's continuous investment in artificial intelligence. Market analysis predicts that Microsoft's total spending on artificial intelligence is expected to reach a record breaking $44 billion in 2023.
On one hand, there are leading supporters of OpenAI, while on the other hand, Microsoft is still leveraging its strong collaborative network to explore new businesses. Last year, Meta released the commercial version of its first open-source artificial intelligence model, Llama 2. Llama 2 is also distributed through Microsoft Cloud Azure and runs on the Windows operating system.
An expert in the field of artificial intelligence told First Financial reporters, "In this wave of artificial intelligence, Microsoft should be considered an absolute winner."
However, as governments around the world strengthen their regulation of artificial intelligence, Microsoft will also face challenges in the future. In addition, the European Union, the United Kingdom, and the United States are planning to launch an antitrust investigation into Microsoft's investment in OpenAI to determine whether the business logic behind this investment involves monopolies, and may require Microsoft to cut ties with OpenAI.
As one of the co founders of OpenAI, Tesla CEO Musk has always harbored resentment towards OpenAI under Microsoft's control. He believes that Microsoft's closure of OpenAI goes against the company's original intention. Nowadays, regulatory agencies are targeting Microsoft, which has become a potential uncertain risk in the market.
Regarding the relationship between the two, Microsoft President Brad Smith previously responded to the public that Microsoft's collaboration with OpenAI has promoted more artificial intelligence innovation and competition, and its new observer status in the OpenAI Council is the only association between the two companies. Microsoft does not own any shares in OpenAI, but only has the right to share profits.
In January of this year, Microsoft Vice President Dee Templeton joined the new board of OpenAI as a non voting observer. Templeton is able to represent Microsoft in OpenAI board meetings and obtain key information, but does not have voting rights on major issues such as OpenAI elections. However, the industry still believes that Microsoft's potential impact on OpenAI cannot be ignored.