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February 10th, 2023
Microsoft’s and Google’s AI Went Head-to-Head This Week
Whether you’re an AI fanboy (or girl;) or are dreading the bots taking over the world, AI is now established. We’re seeing a lightning-speed global calculated annual growth rate (CAGR) of 37.3% from 2023 to 2030.
In 2022, North America held 43% of the $119.78 billion market share. And it’s predicted to lead the AI market in the next ten years. Other regions hold large pieces of the market. Specifically, Asia Pacific and Europe- Japan, China, and Germany, in that order.
The other two regions, Latin America and Middle East/Africa, bring up the back, each holding about the same amount of global market share.
And this week, we saw some fantastic action on the AI front.
We are seeing two of the world’s largest companies hash it out, and it seems the Great Google is actually struggling!
Why? For once in a very long time, a worthy competitor (Microsoft/ OpenAI partnership) has a shot of taking them down via their more advanced AI system. ChatGPT wants to “ensure general artificial intelligence benefits all of humanity.”
Could this spell Google’s demise?
Now, that might sound like a dramatic question, but it definitely tickles the mind.
Anything’s possible. And if Google does go down, who will take its place?
It’s more likely that Google will be knocked down a few pegs and have a worthy competitor or two.
Nonetheless, their grip is slipping on the market.
Microsoft and Google’s AI Battle
It all started when Microsoft partnered with OpenAI for $10 billion. Recently, that partnership has been extended.
Their goal? To develop cutting-edge AI technology and further the mission of OpenAI’s ChatGPT. That mission is to make sure AI benefits all of humanity.
On February 1st, OpenAI unveiled ChatGPT Plus as a paid service. However, Google launched its own artificial intelligence, Bard AI, on February 7th to compete with ChatGPT.
Google’s AI technology has gotten much attention, but not the kind it was hoping for. The AI is showing inaccurate answers. And on February 8th, Google’s stock took a hit, sending the stock down nearly 8%!
The AI Frenzy and Its Global Reach
This battle between two tech giants is a testament to how serious AI technology has become. Companies like Nvidia and C3.ai have seen a jump in their stocks recently, and we can only imagine the possibilities that lie ahead.
For example, Pitchbook shows in the chart below that there was $1.37 billion invested in U.S. businesses that generated AI. They add that this was across just 78 individual investments.
And something even more intriguing is that the AI market saw almost as much investment in 2022 as it has in all 5 years total.
Besides that, the global CAGR for the AI industry is set for 20.1%. That means a figure of $387.45 billion – $1,394.30 billion from 2022- 2029.
Baidu (BIDU), China’s leading search engine, is also planning on launching its own version of ChatGPT in March. Chinese e-commerce giant, Alibaba (BABA) is also working on its own version.
And the Asia Pacific market has a CAGR of a whopping 42%! All of this shows that the global reach and demand for AI are real.
What Does This Mean?
This battle between Google and OpenAI (with Microsoft in the background, of course) could mean huge things for options traders and investors. If Google’s AI technology continues to struggle, options traders could capitalize by shorting their stock or betting against them in other ways.
For example, Apple would benefit from this “war.” They get $15 billion to be Apple’s default search engine. And in 2022, Google dished out $20 billion just to keep Apple from launching its own search engine.
So, if Microsoft begins outcompeting Google, that will likely lead to a renegotiation between Google and Apple. Or, Apple could let Microsoft and Google outbid each other. It wouldn’t matter to Apple who won, because either way, they’d be getting a lot of cash.
On the other hand, if OpenAI’s technology continues to shine, options traders could benefit by investing in Microsoft or buying stocks of companies that are also using OpenAI’s tech.
Opera (OPRA) is the first browser to support the next generation of the internet. It’s also a Norway-based company, which means a different country joining the race. They, too, announced they would be incorporating ChatGpt into their business structure, and its stock rose 4%.
It looks like the AI battle between Google and OpenAI is just getting started. Who wins? We’ll have to wait and see!
Good luck, and happy investing!
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