According to an earnings report on Tuesday, Microsoft is holding the AI edge over rival Google. The company has been making no secret that it views AI as a significant ingredient to its future prospects. This could be an issue for rival Google as Bard, their answer to OpenAI’s ChatGPT has yet to see its full public release.
Microsoft Chairman and CEO Satya Nadella made it a point to also state that this trend is part of an overall shirt for the company. “We look forward to continuing this journey in what is a generational shift in the largest software category, search.”
But it isn’t just ChatGPT. A significant part of their success has to do with their Azure cloud service. Microsoft has spent the last few years making investments in the platform which seem to be paying off. This is due to the shift toward cloud computing. Companies are shifting the computing infrastructure burden to the cloud to help ease their own budgets.
Pointing to this, Satya Nadella remarked, “Azure took share as customers continue to choose our ubiquitous computing fabric from cloud to edge, especially as every application becomes AI-powered.” He went on to speak of the success of their partnerships as part of the reason for this success, “We have the most powerful AI infrastructure, and it is being used by our partner, OpenAI, as well as NVIDIA and leading AI start-ups like Adept and Inflection to train large models.”
All of this comes as Google is also dealing with a potential breakup with Samsung. It was reported that the phone giant was considering ending their deal with Google and instead making the move toward adopting Bing as their primary search provider.
Though not a death blow for Google, it’s still a deal valued in the billions with a company that enjoys an almost 30% market share in the cell phone space. This is likely when Google last week combined DeepMind and Brain into a single team, in the hopes of making progress in the generative AI space.
So what’s the different factor that is working for Microsoft, but not Google? Well according to Ted Mortonson, Baird technology strategist, who spoke with Yahoo Finance Live, “Microsoft has incredible management that executes. In that respect, as you move into generative AI, they’ve been working with OpenAI for years and have a huge investment. It’s powered by Nvidia and sits on Azure. That’s a pretty big initial advantage in this next war.”
So even though it’s clear that Microsoft has made a great deal of inroads, and Google isn’t out for the count, they hold a significant advantage. Ted Mortonson reiterated that point, “I would say Microsoft is holding a lot of the cards right now.”