Microsoft To Offer OpenAI To US Federal Agencies

Microsoft MSFT has revealed its plans to bring OpenAI's highly capable language-producing models, including GPT-4 and GPT-3, to U.S. federal agencies by leveraging its Azure cloud service. The company, based in Redmond, WA, has expanded support for these large language models (LLMs), enabling government entities to access the latest and most sophisticated advancements in language processing.
By integrating GPT-4 and GPT-3 into Azure Government, Microsoft aims to empower federal agencies with powerful language capabilities and foster innovation in the public sector. This initiative highlights MSFT's commitment to delivering cutting-edge technology solutions to enhance the operations of U.S. government organizations.
Since the introduction of OpenAI's ChatGPT, powered by LLMs, there has been a significant surge in its adoption. Microsoft, as an investor in OpenAI, has witnessed this trend and recognized the growing interest among businesses to leverage these models for developing innovative features.
Microsoft's decision to incorporate GPT technology into Azure Government, which caters to U.S. government agencies with cloud solutions, signifies an outstanding milestone. This move represents the first instance of a prominent company making chatbot technology accessible to governments.

Is Regulatory Artificial Intelligence an Opportunity?

UK is set to host the inaugural global summit focused on the safety of AI, as the world confronts both the complexities and potential benefits of this rapidly advancing technology.
Taking place in the UK this autumn, the forthcoming summit will delve into the risks associated with AI, including cutting-edge systems and explore ways to address these risks through coordinated global efforts. The event will facilitate discussions among participating countries, fostering collaboration to establish a unified approach to mitigate AI-related risks and ensuring shared responsibility in this domain.
Giants like Alphabet's GOOGL Google, Meta Platforms META and Amazon.com AMZN have invested a lot in AI in recent years.
Google has dedicated several years to develop a large language model-based generative AI, which is similar to the technology-driven ChatGPT. The company has been at the forefront of pioneering essential components of this technology.
Meta Platforms, the parent company of Facebook, has heavily invested in AI technology, employing it for various purposes, such as ranking News Feed items, content moderation and text translation.
Amazon harnesses AI technology for various applications like voice recognition in Alexa and warehouse optimization. It has not rushed to embrace generative AI like ChatGPT.
Numerous organizations recognize regulatory compliance as an unforeseen avenue for gaining a competitive edge. Being capable of providing AI systems that are trustworthy, meet regulatory requirements and adhere to high standards can offer early adopters, which is a substantial advantage in the short run. This advantage enables AI companies to attract new customers, retain existing ones and instill confidence among investors.

Regulation Can Increases Expenses

This Zacks Rank #3 (Hold) company is heavily invested in AI and therefore, any regulation or taxes could have an adverse effect on its bottom line.
The company expects fourth-quarter effective tax rate to be 19%. For fourth-quarter cash flow, Microsoft expects to make a $1.3 billion cash tax payment related to the R&D capitalization provision.
The Zacks Consensus Estimate for MSFT's 2023 earnings is pegged at a profit of $9.66 per share, indicating year-over-year growth of 4.89%. The consensus estimate for fourth-quarter 2023 revenues is pegged at $55.35 billion, indicating year-over-year growth of 6.73%.
Shares of Microsoft have gained 35.6% year to date compared with the Zacks Computer and Technology sector's growth of 30.8% in the same period.

Image by Turag Photography on Unsplash