Both companies see great potential in AI-enabled applications, but which investment will benefit them most?
Aside from its success with(MSFT-2.18%) OpenAI’s rapidly growing chatbot – ChatGPT – launched in November last year, Artificial Intelligence (A.I.) has spurred competition among various Technology players rushing for their own A.I. development acceleration.
The global generative A.I. market is estimated to grow at an impressive annual pace of 34% towards 2030, bringing in total revenue of around $109 billion. This is seen as the next big movement in technological development, with applications such as chatbots preparing to dominate the sector.
Microsoft and other major technology companies have been investing heavily in A.I., thus resulting in growth within the industry.
Cloudflare (NET -4.11%), a cloud platform provider striving to enhance internet-related activities’ security, performance, and reliability, could benefit from this race to develop generative A.I. applications.
With two tech stocks vying to capitalize on the profitable artificial intelligence (A.I.) sector, which should be chosen? To determine the answer, let’s explore them in further detail.
The Benefits Of Microsoft: A Comprehensive Case Study
Microsoft has been a pioneering force in generative A.I. technology, most notable being ChatGPT, created by OpenAI. This chatbot can generate written content like essays, jokes, articles, and poetry based on user input.
The tremendous growth that ChatGPT has witnessed lately is evident from the fact that in January 2023, it had 13 million unique daily visitors – a twofold increase from December 2022 – and 100 million monthly active users.
UBS points out that no consumer internet app has ramped up at such a pace in the investment bank’s 20-year history of tracking the internet market. It is worth noting that the likes of Instagram and TikTok took two and a half years and nine months, respectively, to reach 100 million users.
As we previously saw, a surge in the need for generative A.I. is predicted in upcoming years – an area where Microsoft could have an advantage. This would indicate that they might have a successful product on their hands.
Microsoft and OpenAI are attempting to monetize ChatGPT, an A.I. application that facilitates the generation of content: ranging from text, video, audio, images, and even code. This subscription service costs a monthly rate of $20 in the United States.
For customers seeking quicker response times and improved dependability during busy times, ChatGPT Plus provides a fee-based solution. The service ensures users can access enhanced support to get their desired answers quickly.
OpenAI plans to deliver ChatGPT with an API (application programming interface) for businesses to incorporate into their applications or services easily. Differently, Microsoft has already adopted ChatGPT in its Bing search engine.
Microsoft, not a major player in the search engine market, can be encouraged because its AI-powered search engine has received more than one million user requests. This displays the company’s promising potential in this sector.
Last year, despite Alphabet’s Google claiming the top spot in global search engine market share (at a figure estimated to be close to 9%), the market was abuzz with hopeful speculation about ChatGPT’s potential expanding user base.
Generative A.I. applications’ increasing usage may result in a big win for Microsoft because it could draw advertisers to its platform and create another income stream. Additionally, this progress could give scope for Microsoft to reap big rewards in the future.
The Benefits Of Cloudflare: A Comprehensive Guide
Cloudflare’s cloud infrastructure is anticipated to be essential for the rollout of applications based on generative A.I. – hence providing exposure in the space as an indirect play. This is particularCloudflare’segard to its implementations in chatbots.
CEO Matthew Prince’s statement on Cloudflare’s latest earnings conference call indicated that OpenAI is already one of their customers.
Almost 80% of websites utilizing content delivery networks use Cloudflare, indicating it has become necessary in this domain. Consequently, its use can also be expected in future generative A.I. applications.
Cloudflare, a supplier of important online infrastructure and security services, could benefit from the race for generative A.I. control despite which entity eventually takes the lead. Therefore, whichever developments stream from this space can potentially contribute to Cloudflare’s progress.
Ultimately, the choice between Cloudflare and Microsoft for A.I. investments will depend on the individual investor’s goals and risk tolerance. Both companies have impressive A.I. capabilities and are worth considering for A.I. investments, but investors should carefully consider the specific strengths and weaknesses before deciding.
Source: fool
