The Partnership and the Trigger of the AI Race
We’re talking about the deepening partnership between Microsoft and OpenAI. They’ve essentially fired the starting gun for a new kind of race – the AI race. But as we sprint off the blocks, it’s beginning to feel like the initial ecstasy of investors might be dissolving into something more probing…more skeptical.
The Sobering Reality and the Rising Skepticism
Noted expert on all things Wall Street, Brent Thill from Jefferies, drops a sobering truth bomb. He discusses the astronomical costs that come with the development, hosting, and serving of AI products. It’s an expensive race, and investors are starting to sweat about the “potential for [fiscal 2024] commentary regarding a material increase.” And they should, given that the company’s latest earnings report is just around the corner.
The Fickle Heart of Wall Street and the AI Announcements
Now, here’s the twist. You’d think that major AI announcements would make Wall Street swoon. But it turns out, the Street has a fickle heart. The sector’s big names have already rocketed skyward in stock value, and the mere whisper of AI may not cut it anymore.
The Soaring Tech Stocks Amid the Investor Euphoria
Microsoft, after declaring its whopping $10 billion multiyear investment in OpenAI, saw its shares balloon over 44%. You’d think that’s quite the feat. But wait till you hear about the others.
Tomorrow, we’ve got Alphabet (Google’s parent company) reporting earnings – their shares are up 36%. Following closely, Meta is set to reveal its report card. Their stock’s leaped an insane 133% year to date. Not too far behind, Apple’s up by 54%, and Amazon’s making strides with a 50% rise.
The Reality Check Amid the Thrill
It’s a wild ride but amid the investor euphoria, remember the sobering reality of the vast costs of AI development and deployment. Now that’s something to chew on.
