{"id":2078986,"date":"2023-10-25T12:46:01","date_gmt":"2023-10-25T16:46:01","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/microsoft-extends-cloud-lead-over-alphabet-with-focus-on-openai-big-clients\/"},"modified":"2023-10-25T12:50:39","modified_gmt":"2023-10-25T16:50:39","slug":"microsoft-extends-cloud-lead-over-alphabet-with-focus-on-openai-big-clients","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/microsoft-extends-cloud-lead-over-alphabet-with-focus-on-openai-big-clients\/","title":{"rendered":"Microsoft solidifies cloud dominance over Alphabet by prioritizing OpenAI and attracting major clients."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fmicrosoft-extends-cloud-lead-over-alphabet-with-focus-on-openai-big-clients%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2078986&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\"><br \/>\n<?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><html><body><\/p>\n<div class=\"entry-content\">\n<p><span class=\"text__text__1FZLe text__dark-grey__3Ml43 text__regular__2N1Xr text__small__1kGq2\" data-testid=\"Text\">By <\/span>Aditya Soni<\/p>\n<p>October \u200d25, 2023 \u2013 1:59 PM\u200d UTC<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-3\" style=\"min-width: 320px; min-height: 50px; text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-3'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<blockquote><p>(Reuters) \u2013 Microsoft is leading the way in profiting\u200c from <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wall-street-ends-sharply-lower-on-bank-contagion-fears\/\" title=\"Wall Street ends sharply lower on bank contagion fears\">generative artificial intelligence<\/a>, thanks to its early investments in OpenAI and focus\u2063 on major clients. This has raised concerns that Google&#8217;s parent company, Alphabet, could\u200b lose market share in the cloud-computing industry.<\/p><\/blockquote>\n<blockquote><p>Cloud spending by businesses looking to implement AI\u200d features has driven growth for Microsoft&#8217;s Azure platform in the first quarter, resulting in a nearly 4% increase in the company&#8217;s shares on Wednesday.<\/p><\/blockquote>\n<blockquote><p>On the other\u200c hand, Alphabet&#8217;s cloud unit experienced its slowest growth in \u2063nearly three years, \u2064as its reliance\u2064 on smaller clients hindered its progress. This caused the company&#8217;s shares to\u200b plummet \u200bmore than 9%.<\/p><\/blockquote>\n<blockquote><p>In the battle to tap into the next\u2064 growth driver for the cloud business, Microsoft has focused on \u2062its existing core business clients who already use\u200c its software services, while Google has \u200ctargeted startups.<\/p><\/blockquote>\n<blockquote><p>According to Morningstar analyst Ali \u2064Mogharabi, &#8220;Demand for artificial intelligence drove Microsoft&#8217;s growth. \u2063Demand among Google&#8217;s larger clients was similar, but\u2062 the firm is more exposed to\u200b high-growth and startup clients, which have been more \u200baggressive with cost-control efforts.&#8221;<\/p><\/blockquote>\n<blockquote><p>If Alphabet continues to \u2063lose \u200dmarket share, it could\u200c potentially wipe out\u2063 over $150 billion from its market value, highlighting concerns that its emphasis on startups and slower rollout of AI services is delaying the benefits of this technology.<\/p><\/blockquote>\n<blockquote><p>Meanwhile, Microsoft&#8217;s shares are expected\u200b to gain around $100 billion in market capitalization.<\/p><\/blockquote>\n<blockquote><p>&#8220;Microsoft \u200bis leveraging its existing software relationships, while Google is entering as a challenger,&#8221; said Krishna Chintalapalli, \u2062portfolio\u2064 manager \u2063at Parnassus Investments, an investor in Alphabet and Microsoft.<\/p><\/blockquote>\n<blockquote><p>The results indicate that cloud spending is \u200bprimarily coming from enterprise clients, while smaller businesses are reducing their expenditure, according to Chintalapalli.<\/p><\/blockquote>\n<blockquote><p>The strong\u2064 use of AI contributed to a 3 percentage point boost in Microsoft&#8217;s\u200d cloud business in the September quarter.<\/p><\/blockquote>\n<blockquote><p>CEO Satya Nadella revealed that about 40% \u2064of Fortune 500 companies were using the test version \u200bof its &#8220;Copilot&#8221; AI service,\u200c which is powered by OpenAI&#8217;s technology.<\/p><\/blockquote>\n<blockquote><p>The company plans to launch a $30-a-month offering next month for its 365 service, which can summarize a day&#8217;s worth of emails into a quick update.<\/p><\/blockquote>\n<blockquote><p>Analysts believe this \u200cwill further drive the adoption of Microsoft&#8217;s\u2062 AI services. Alphabet has also incorporated AI into products such as its flagship Pixel phones and\u200c recently\u2062 tested adding generative AI to its search engine.<\/p><\/blockquote>\n<blockquote><p>&#8220;Unlike many others who are promoting their AI capabilities, Microsoft is actually \u2064delivering meaningful AI products to their customers,&#8221; stated brokerage D.A. Davidson.<\/p><\/blockquote>\n<blockquote><p>At least 22 brokerages have\u200d raised their price targets for the software giant, with a median view of $400, which is 17% higher \u200cthan the company&#8217;s last traded share price \u200dof\u2063 $342.78.<\/p><\/blockquote>\n<blockquote><p>While many analysts\u2063 are optimistic about \u2063Alphabet&#8217;s core search business, they warn that the weakness in its cloud business will persist.<\/p><\/blockquote>\n<blockquote><p>&#8220;It&#8217;s unclear how widespread Google\u2064 Cloud optimization efforts are and how far along customers \u200care in the journey, but expect \u2062these headwinds to persist for at least \u2064a few \u200cmore quarters,&#8221; cautioned Bernstein analysts.<\/p><\/blockquote>\n<blockquote><p>AI is expected to become \u200da major growth driver for Alphabet in 2023, especially with the \u200canticipated\u2062 launch of \u200bGemini, a collection of large-language models.<\/p><\/blockquote>\n<blockquote><p>&#8220;Early results for Gemini are very promising,&#8221;\u200c said CEO Sundar Pichai.<\/p><\/blockquote>\n<blockquote><p>Microsoft\u2064 currently trades at 28.5 times its 12-month forward\u2062 earnings estimates, compared to Alphabet&#8217;s parent company, which trades at 24.93 times.<\/p><\/blockquote>\n<p>Reporting by Aditya Soni in Bengaluru; additional reporting by Akash Sriram; Editing by Arun Koyyur<\/p>\n<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-4\" style=\"min-width: 320px; min-height: 50px; text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-4'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<p class=\"dpsp-share-text\" style=\"margin-bottom:10px\"> \t\t \t\tShare this \u2063post!\t<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Congressman James Comer says the longer the \u200cGOP conference goes without electing a speaker<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Tom Emmer&#8217;s House Speaker Bid lasts hours while MSNBC pundit Michael Cohen testifies against Trump.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>South Carolina Senator Tim Scott \u200bvisits Chicago to speak to\u2063 voters. <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>A new lawsuit accuses NewsGuard of \u2062defaming\u2062 Consortium News.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Microsoft is leading the way in profiting from generative AI through early bets on OpenAI and focus on big clients.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Apple increased the subscription prices of Apple TV+\u2064 and Apple News+.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Elon Musk said\u200c the social media platform X will soon launch two\u200d new tiers of premium subscriptions.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Bitcoin jumped on Friday\u200c above $30,000 for the first\u200b time since July, with gains for the week \u200bsurpassing 10%.<\/p>\n<\/p><\/div>\n<p> rnrn  <\/p>\n<h2> \u200cWhy has Alphabet&#8217;s <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/microsoft-extends-cloud-lead-over-alphabet-with-focus-on-openai-big-clients\/\" title=\"Microsoft solidifies cloud dominance over Alphabet by prioritizing OpenAI and attracting major clients.\">cloud unit experienced slow\u2062 growth<\/a>, and what impact has\u200b this had on the company&#8217;s market value?<\/h2>\n<p><span>  Nerative \u2062AI and AI services\u2064 indicate strong potential\u200b for both\u200c Microsoft and Alphabet.\u200d However, recent data suggests that Microsoft has taken the lead in profiting from generative artificial intelligence, causing concerns \u200dfor Alphabet&#8217;s future in the cloud-computing industry.<\/p>\n<p>Microsoft&#8217;s early investments\u200b in OpenAI and its focus on major clients have allowed the company to secure a\u2062 strong position in the cloud industry. This strategy\u200c has resulted in significant growth for Microsoft&#8217;s\u2064 Azure platform, with a \u200dnearly 4% increase\u200d in the company&#8217;s shares. On \u200dthe \u200dother hand, Alphabet&#8217;s\u2063 cloud unit experienced its \u200cslowest growth in nearly three years, primarily\u2064 due\u200b to \u200dits \u200creliance on smaller clients. As a\u200c result, Alphabet&#8217;s \u2064shares plummeted by more than 9%.<\/p>\n<p>In the battle to tap into the next growth driver for the cloud business, Microsoft has focused on its existing core business clients who are already\u200c using its software services. In contrast, Google has targeted startups.\u2063 While demand for artificial intelligence drove growth for both companies, Google&#8217;s larger clients have been more aggressive with cost-control efforts, \u2062hindering its progress.<\/p>\n<p>If Alphabet continues to lose market share, it could potentially lose over $150 billion from its market value, \u200bhighlighting \u2063the risk of\u200d its emphasis on startups and slower rollout of AI services. In contrast, Microsoft&#8217;s shares are expected to gain \u200daround $100 billion in market capitalization.<\/p>\n<p>The results indicate that cloud spending is primarily coming from \u200denterprise clients, \u200bwhile smaller businesses are reducing their \u200bexpenditure. Cloud spending by businesses looking to implement \u200bAI features has contributed significantly to\u200d Microsoft&#8217;s growth. CEO Satya Nadella revealed that about 40% of Fortune 500 companies \u2063were\u200d using\u200c the test version of its &#8220;Copilot&#8221; AI\u2063 service, powered\u2062 by OpenAI&#8217;s technology. The company plans to launch a $30-a-month \u200coffering\u2063 next month for its 365 service, further driving the adoption\u200c of \u2063its AI \u2063services.<\/p>\n<p>Analysts believe that Microsoft is\u2063 delivering meaningful AI\u200c products to its customers,\u2063 which\u2062 sets\u2064 it\u2064 apart from others who\u200b are \u200bmerely\u200d promoting \u2062their AI capabilities. At least 22 brokerages\u200b have raised their price\u200d targets for Microsoft, with a\u2062 median view of $400, 17%\u200d higher than the company&#8217;s last traded share price.<\/p>\n<p>While analysts are optimistic about Alphabet&#8217;s core \u200csearch business, they \u2064caution that the weakness in its cloud business is likely to \u200cpersist. It remains unclear\u200b how widespread Google Cloud optimization efforts are and how far along customers are\u2063 in the journey. However, AI is expected to become a major growth driver for Alphabet in 2023,\u2063 especially with the anticipated launch of Gemini, a collection of large-language models.<\/p>\n<p>In conclusion, Microsoft&#8217;s early investments in AI\u200b and its focus on major\u2064 clients have given the\u200d company a leading edge in profiting \u2064from <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/a-look-at-ai-mishaps-in-journalism-as-google-preps-tool-for-newsrooms\/\" title=\"AI mishaps in journalism examined as Google prepares newsroom tool.\">generative artificial \u2063intelligence<\/a>. This \u2064has caused concerns for\u2062 Alphabet, whose reliance on smaller clients\u200d has hindered its progress in the cloud industry. The results highlight the importance of targeting enterprise clients \u200cand delivering meaningful AI products to\u200d drive\u2062 growth in the cloud-computing industry.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Aditya Soni, October 25, 2023 \u2013 1:59 PM UTC. Microsoft&#8217;s early investments in OpenAI and focus on major clients are helping it surpass Alphabet in profiting from generative artificial intelligence. This raises concerns about Google&#8217;s share in the cloud-computing market as businesses increase their cloud spending.<\/p>\n","protected":false},"author":1911,"featured_media":2078987,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[],"class_list":["post-2078986","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2078986","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1911"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2078986"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2078986\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2078987"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2078986"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2078986"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2078986"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}