Why Microsoft’s Latest AI Features Will Be Tough for Google, Rivals to Match
Microsoft is expanding its artificial intelligence tools beyond search into its core office productivity suite. According to analysts at Oppenheimer, Google and other tech companies working on their own AI offerings may struggle to keep up
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According to Oppenheimer, Microsoft (Ticker: MSFT) benefits from a close relationship with ChatGPT developer OpenAI and the data of around 1.5 billion users.
That could mean Microsoft’s 365 Copilot — the AI tech the company rolled out Thursday to work with apps like Word, Excel, PowerPoint, Outlook and Teams — will cement its apparent lead in AI-enabled services.
Oppenheimer analysts noted that both Alphabet (GOOG), Google’s parent company, and Salesforce (CRM) had their own AI announcements this week. However, they wrote that Salesforce
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Leveraging ChatGTP technology will provide an “indirect grant” to Microsoft, OpenAI’s largest investor. Microsoft has confirmed that Copilot will use GPT-4, the latest version of the technology behind ChatGPT.
Microsoft’s integration of AI tools into its Office productivity suite is both a vote of confidence and a potential risk to its use in the Bing search engine, where it has relatively little to lose to Google given its small market share. However, analysts were delighted with its early demonstration.
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“In our view, Microsoft 365 Copilot will be a great productivity boost for users,” wrote analysts at Mizuho Securities. “We believe Microsoft will significantly monetize Microsoft 365 Copilot — as well as its broader generative AI initiatives — over time.”
Microsoft shares rose 0.5% in premarket trading on Friday, while futures on the S&P 500 fell 0.6%.
Other companies are also lining up to integrate AI technology into their services. Shares of Baidu (BIDU), often dubbed China’s Google, rose 14% on Friday in Hong Kong as analysts adopted a bullish tone on the launch of its AI chatbot ERNIE. Investors were initially disappointed that Thursday’s public demonstration of ERNIE didn’t include a live interaction with the technology.
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“Baidu is more likely to replicate ChatGPT in China because it is ahead of its competitors in technical accumulation of large AI models and owns a lot of Chinese data in its search engine,” said Third Bridge analyst Jamie Chen in a research note. “Our experts predicted that it will take 2-3 years for Chinese gamers to develop models that are 80% as powerful as ChatGPT.”
Write to Adam Clark at [email protected]