Technology giant Microsoft (MSFT) is forming a new group that will develop artificial intelligence (AI) apps and provide tools for third-party customers.
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The new group is being led by Jay Parikh, the former global head of engineering at Meta Platforms (META). The group will be called “Core AI – Platform and Tools,” according to Microsoft. In a memo to staff, Microsoft CEO Satya Nadella said the focus is “to build the end-to-end Copilot & AI stack for both our first-party and third-party customers to build and run AI apps and agents.”
The announcement comes nearly a year after Microsoft hired DeepMind co-founder Mustafa Suleyman to lead Copilot AI initiatives at the software developer. In the new AI unit, Parikh will work closely with Suleyman as well as other top technology leaders at the company.
The Killer AI App?
The move to create AI applications that consumers can use comes as artificial intelligence remains the dominant theme in technology. However, many analysts say that AI has, so far, lacked a killer application to draw in consumers and boost revenue at Microsoft and other technology companies. After an initial explosion in popularity, interest in AI chatbots such as ChatGPT have begun to wane.
However, as the leading investor in ChatGPT creator OpenAI, Microsoft remains at the center of the AI revolution and continues to add the technology across its products and platforms — from its Bing search engine and Xbox video games to its cloud computing unit and Teams video conference system.
“Our success in this next phase will be determined by having the best AI platform, tools, and infrastructure,” wrote Nadella in the memo to staff. MSFT stock has risen 8% in the last 12 months.
Is MSFT Stock a Buy?
The stock of Microsoft has a consensus Strong Buy rating among 29 Wall Street analysts. That rating is based on 27 Buy and two Hold recommendations issued in the last three months. The average price target on MSFT stock of $505.73 implies 21.39% upside from current levels.
