Microsoft (NASDAQ:MSFT) is developing its own artificial intelligence (AI) large language model (LLM) to compete against Alphabet (NASDAQ:GOOGL)-owned Google’s Gemini and OpenAI’s ChatGPT, The Information reported. The project, internally named MAI-1, is under the supervision of Mustafa Suleyman, who recently joined MSFT to spearhead the newly formed division called Microsoft AI.
MAI-1 is expected to surpass Microsoft’s previous open-source models in scale. However, the specific application of MAI-1 is yet to be finalized and will hinge on its performance. Moreover, the report highlighted that Microsoft may offer a glimpse of the model at its Build developer conference later this month.
MSFT is Leveraging AI to Accelerate Growth
Microsoft has invested significantly to boost its AI capabilities. Microsoft Cloud exceeded $35 billion in revenue in Q3 of Fiscal 2024, up 23% year-over-year, driven by AI. MSFT’s Azure, which offers AI training and inference, gained market share in Q3.
Looking ahead, MSFT remains well-positioned to capitalize on AI-led tailwinds. Microsoft is targeting a wider customer demographic by offering affordable solutions.
Moreover, in a strategic collaboration with OpenAI, Microsoft embarked on a massive $100 billion data center venture. At the heart of this endeavor is the development of a supercomputer named “Stargate,” poised to reinforce Microsoft and OpenAI’s dominance in the AI landscape.
Is Microsoft a Buy or Sell Right Now?
Microsoft stock is up about 35% in one year. Moreover, Wall Street is bullish about its prospects. With 31 Buys, one Hold, and one Sell recommendation, Microsoft stock has a Strong Buy consensus rating. Analysts’ average price target of $489.56 implies 18.38% upside potential from current levels.
