Microsoft Leading Alphabet In Race To Monetize Generative AI

Microsoft’s early lead over Alphabet in Generative AI is paying off. How so? After the two tech giants reported third quarter results Tuesday, Microsoft stock rose 6% while Alphabet shares eased 7% in after-hours trading.

Why the different trajectories of these stocks? Nearly a year after Microsoft launched ChatGPT, the answer is in the clouds. While Microsoft’s Azure cloud revenue grew faster than investors expected, Alphabet’s cloud revenue disappointed, according to CNBC.

Why did Microsoft prevail in the cloud? The software giant’s OpenAI customer count rose 65% and Azure’s share of revenue from Generative AI grew to 3%, CNBC reported.

By contrast, in response to investor questions about monetizing Generative AI, Alphabet CEO, Sundar Pichai, said it’s still “early days,” CNBC noted.

This is ironic since a former Google researcher, Aidan Gomez — now CEO of Cohere, a large language model startup — co-authored the 2017 paper on transformers that contributed heavily to the success of Generative AI chatbots.