Sundar Pichai, the CEO of Alphabet, is convinced that Google may find a way to sell relational AI tools for a profit. Satya Nadella, the CEO of Microsoft, claims that his business is already doing it.
On Thursday, both firms reported better-than-expected monthly sales and profits. And the results caused both stock prices to rise, with Alphabet’s stock prices rising even more as a result of its innovative plans to buy up more shares and pay its first-ever dividend.
However, under the hood and in the opinions of their professionals, the near-term fortunes of Microsoft and Google look different, at least in terms of their conceptual AI efforts. Which of the adversaries’ competing efforts, according to investors, employees, and potential customers, will receive the most of the hundreds of billions of dollars in spending that will be expected to be spent on such applications in the upcoming years.
Nadella claimed that Microsoft nowadays has 1.8 million clients for GitHub Copilot, a conceptual AI tool that aids engineers writing software code, during a phone call with economic analysts on Thursday. That’s away from 1.3 million users a third before.
Among the Fortune 500 businesses, 60 percent use Copilot for Microsoft Office 365, a virtual assistant that uses conceptual AI to assist employees in creating letters and papers, and 65 percent use a Microsoft Azure Cloud service that gives them access to generating AI technology from ChatGPT creator OpenAI. “Azure has become a port of call for essentially anyone who is working on an AI project,” Nadella said. Microsoft’s $13 billion investment in OpenAI has undoubtedly helped those users win.
The buzz of interest in AI services helped drive revenue for Microsoft’s biggest unit – cloud services – up by seven percentage points compared to a year ago, and Microsoft’s overall sales rose 17 percent to nearly $62 billion. It furthermore gained sky market share, Nadella added. Microsoft signed $100 million cloud deals in the third, an increase of 80% over the prior quarter, and a $10 million deal total doubled.
Alphabet’s Pichai had objectives to talk about too. He claimed in a distinct call to researchers that more than 1 million conceptual AI designers are using Google Cloud’s conceptual AI equipment, and that 60% of relational AI startups supported by investors are Google Cloud customers. Additionally, genetic AI is boosting the advertising efforts of Google’s advertising customers.
However, Pichai did not disclose how many people Google had enrolled in the company’s Gemini Advanced, a $20 monthly subscription plan that gave access to the most advanced AI robot available.
Pichai, who runs Google’s primary business of search, did not disclose revenue figures for relational AI experiments that used generative AI to describe query results. Google might have fewer opportunities to display search ads because it gives more immediate answers to searchers, as fewer opportunities are there for people to conduct more thorough searches. Google’s advertising may also change depending on the type of advertisements.
Pichai claimed that the tests demonstrate that generative AI-powered search users perform more searches, but that Google’s operations are likely less profitable because the underlying technology that powers more sophisticated searchers costs more than the operating costs of its traditional systems.
Pichai didn’t show any signs of concern on either front. “We are really, really confident we can control the cost of how to provide these concerns,” he said. “I am confident and at ease that we will be able to manage the marketing move here as well. It will sing out over day”.
Alphabet’s total sales rose 15 percent to almost $81 billion.
It spent about the same amount — around $12 billion — as Microsoft investing in infrastructure like machines and datacenters last quarter. However, the benefits and opinions from Thursday suggest that Microsoft is moving in the right direction.
For then, shareholders are giving both firms liberty. At the close of Thursday, Microsoft shares were up 35 percent over the past month, and Alphabet 51 percent over the past year. Both are at or close to all-time peaks. The trendlines may soon change, though, if consumers continue to flock to Copilot and if the leads for Gemini and Google search aren’t improving.
