MSFT Shares Should Be Trading Off
Google bloodied MSFT partner OpenAI. Where's the fallout?
Microsoft (MSFT) hitched its wagon to OpenAI. MSFT shares took off as a result over the past several years. However, MSFT has recently seen its partner - OpenAI - bloodied by Google (GOOGL). Therefore, I am puzzled as to why MSFT shares have started to recover. MSFT shares should be getting hammered.
While it is true that OpenAI may rush out a more competitive model this week, I don’t see how OpenAI will ever recapture and retain the LLM leadership position, barring some breakthrough on the training or inference side. To that end, Google is the company that is most likely to invent a breakthrough, as its AI lab is typically the lab that creates breakthroughs.
Google will extend its lead over OpenAI and Anthropic over time as Google:
is better capitalized than OpenAI and Anthropic;
has the premier AI research lab;
is vertically integrated (TPU chips, cloud, LLMs, apps) and,
has embedded Gemini across its product portfolio, creating a significant opportunity to drive user adoption, where Gemini has captured 200 million users over the past several months.