Microsoft Vs. Google: Analyst Says There's A Clear 'Usain Bolt Style' Leader In Week's AI Battle

The week saw a spate of news flow on artificial intelligence from both Microsoft Corp. MSFT and Alphabet Inc. GOOGL GOOG. An analyst from Wedbush summarized the week’s scorecard in the battle between the two big techs.

Microsoft Leads Race: The AI race will be a long one, with Google as well as Apple Inc. AAPL, Meta Platforms Inc. META and other tech stalwarts expected to spend billions over the coming year, Ives said in a note.

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This week saw Microsoft and Google competing on the frontline, he noted. Microsoft is clearly leading the race so far in “Usain Bolt style,” the analyst said. Shortly after Microsoft’s announcement of an investment in OpenAI’s ChatGPT for $10 billion, Google debuted on Wednesday its AI tech named Bard, he noted.

The week was a “massive success story” for Satya Nadella, while Google is left with more questions than answers with an underwhelming Paris launch event for Bard and an AI mistake, which was an “absolute gut punch” to Google’s AI credibility, Ives said.

Real Opportunity: Microsoft’s monetization opportunity is real as every percent share that moves from Google Search to Bing is billions of ad dollars in Redmond's pocket, the analyst said. This market share shift largely relies on execution by the software giant, he added.

The analyst expects much more cloud integration with Azure during 2023. “We believe that this strategic investment will massively boost the cloud stalwart to a robust position in the battle for AI demand as MSFT’s cards are now on the table and the AI strategy picking up significant traction,” he added.

Price Action: In premarket trading, Microsoft shares were slipping 1.26%, to $260.30, and Google was moving down 0.42%, to $95.06, according to Benzinga Pro data.

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