The future of Microsoft is in artificial intelligence. And the market knows it
Three hundred and sixty dollars a share. For Microsoft, this is a price never seen since the placement that took place way back in 1986. As the investment banks explain, the merit lies in the group’s prospects. In particular, the market attention is on the decision of the software and cloud giant to charge 30 dollars a month to corporate customers who use Microsoft 356 Copilot, its artificial intelligence-based chatbot integrated into Word, PowerPoint, Excel, Outlook and teams.
The price of the new service is much higher than what analysts had expected, but perhaps more importantly, it gives measurable value in simple terms to artificial intelligence. It is a real change of pace compared to the bombastic but rather nebulous indications on the potential of this new technological innovation. In detail, the fee is added to the subscription for Copilot, the artificial intelligence assistant that works on Microsoft 365, which could push monthly prices for corporate customers up to 83%. This is no small matter given that more than 382 million people used commercial versions of Office 365 in the last quarter.
A world where the rules are changing
The announcement, in a certain sense comparable to Nvidia’s guidance in May, has left the entire tech and financial world speechless as they have begun to metabolize the change of pace. Hence the positive reaction of the market with investors who not only rewarded the Microsoft stock, but also reacted by focusing on similar shares renamed Meme Stock, intensifying a trend that has been going on for some time especially in retail.
The MEME ETF, which has the Solactive Roundhill Meme Stock Index as its underlying, has in fact gained 61% since the beginning of the year. With particularly significant peaks. Coinbase shares, for example, are close to +200% since the beginning of the year. Behind these amazing performances are the do-it-yourself investors who often move on the indication of what emerges in online forums. Among them, as measured weekly by the American Association of Individual Investorsearnings expectations are on the rise year-to-date, last week hitting a high since 2021.
This is not the only novelty at Microsoft
In fact, the group has also started a partnership with Meta for Llama 2, a new generation of the linguistic model already launched by Mark Zuckerberg’s company and based on artificial intelligence. The owner of Facebook, Whatsapp, Instagram and now also Threads thus enters more and more into the AI arena already presided over by Google’s ChatGpt and Bard.
But what exactly is it about? Llama 2 is an open source model and is freely available for both research and commercial use. “It has been pre-trained on a 40% higher data volume than Llama 1 and improvements have been made to its architecture – writes Zuckerberg in an official post -. For the refined models, we collected more than 1 million human annotations and applied supervised refinement and reinforced learning with human feedback, with excellent results in terms of safety and quality”.
In particular “Llama 2 is designed to allow developers and organizations to create tools and experiences based on artificial intelligence – writes Microsoft on its blog – Meta and Microsoft share a commitment to democratizing AI and its benefits, and we’re thrilled that Meta is taking an open approach with Llama 2.” “When software is open – adds Zuckerberg – more people can study it to identify and fix potential problems. In general, I believe that if the online ecosystem was more open it would lead to more progress and this is why we are making Llama 2 open source”.
There’s time for Activision
The operation was not completed within the expected deadline (July 18). But nothing excludes that it is just a slip as the Wall Street Journal reports. Meanwhile, in recent days Microsoft has brought home the go-ahead from the California federal court. According to the judges, the group can proceed with the purchase of the video game giant Activision Blizzard, a transaction valued at $69 billion (62.7 billion euros).
“The Court considers that the Federal Trade Commission (FTC) has not demonstrated that the merger could substantially reduce competition” as explained in the sentence. With this decision, Microsoft will be able to take over Activision Blizzard which develops the games ‘Call of Duty’, ‘World of Warcraft’ and ‘Diablò. Meanwhile, it will present proposals to the British competition authority, the Competition and Markets Authority, to overcome concerns related to the operation. “We look forward to hearing any proposal from Microsoft to restructure the transaction to address the concerns raised in our final report,” a CMA spokesperson said.