The golden goose of big tech

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At a recent earnings call, executives from Meta, Microsoft, and Alphabet talked about increasing investments in AI as it is a major source of growth.Experts believe this investment will continue to grow

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Niranjana Bath



issued – May 12, 2023 8:53 AM

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Artificial intelligence (AI) is arguably the word of the year in tech. It’s true that turmoil in the tech space is nothing new, but with the heads of tech giants like Alphabet, Microsoft and Meta mentioning the word AI more than 200 times on investor conference calls, the situation is growing. You can see that it is about to change (if not). already). These executives noted how they are rapidly increasing their investment in AI, as AI tools are expected to be a major source of growth.

what they said

The tech industry is going through a tough time, with some big companies cutting jobs. But despite announcing these cost cuts, big tech companies continued to invest in artificial intelligence, with generative AI taking center stage.

During the earnings call, CEO Sundar Pichai gave an update on Alphabet’s AI business and how the company plans to focus on AI and the metaverse, stating, “Our investments and breakthroughs in AI over the past decade have enabled us to We were in a good position,” he said. Alphabet CFO Ruth Porat said the tech giant is slowing the pace of operating expenses while creating capabilities in key areas of investment, particularly AI.

Meta’s Mark Zuckerberg said the company plans to continue to invest more in AI. “Our AI work is split into two main areas. It’s the infrastructure for rankings and rankings, and it’s something we’ve been working on for years.” And second, a new generative underlying model that enables a whole new class of products and experiences. “

Microsoft, a pioneer in the application of AI, made similar claims in its earnings call. “We have the most powerful AI infrastructure, our partners OpenAI and NVIDIA, and he is used by leading AI start-ups like Adept and Inflection to train large-scale models,” said CEO Satianadella. I am.”

Microsoft expects Azure revenue growth of 26% to 27% on a constant currency basis for the current quarter. This includes about 1 point from AI services.

We spoke to people working in the AI ​​space to share how AI could impact big tech companies and ultimately drive more revenue for them and their advertisers.

New earners for tech giants

according to DeepAI founder Kevin Barragona says big tech companies can expect significant growth from their AI investments. “We can only speculate, but at this point it is likely that big tech companies are investing in AI more than they are getting from it. We don’t know if we’ll win yet, the goal is to win that battle, and we’re all investing heavily to do that.”

“AI played a key role in Q1 2023 growth for big tech companies with the launch of new AI-powered products. We expect to see significant gains in areas such as search, advertising, chatbot assistants and image manipulation,” he added.

Sauvik Banerjee, Rezolve’s global CEO of products, technology and digital services, said the emergence of generative AI is accelerating earnings forecasts for big tech companies. “Meta has had its own AI as part of the stack for a very long time, and N=1 personalization has been the core powering the individual feed framework. Microsoft’s commitment to Open AI will improve efficiency across Azure and bring O365 to the native Azure stack for all Azure customers.”

“Since all of the above companies have direct subscription and consumption economic models, revenue for all three companies will grow significantly year-over-year each quarter,” Banerjee said.

Grapes co-founder and CEO Shradha Agarwal goes along the same lines, explaining how AI is helping these companies grow, which in turn helps brands and advertisers grow.

“For companies like tech giants Alphabet, Meta and Microsoft, leveraging artificial intelligence is a natural next step. These days, AI is helping companies grow in two different ways. One is to enable the expansion and evolution of services for our consumer base, and the other is to help organizations build AI-enabled operations,” said Agarwal.

“Virtual assistants such as Google Assistant, Amazon Alexa, and Microsoft Cortana are also undergoing significant evolution as their parent companies further experiment with AI and its applications. With a vast portfolio of human-centric digital products and services, we are well-positioned to create and bring AI experiences to the masses,” she added.

AdOnMo Chief Operating Officer Rajeev Dhal said big tech companies are using the power of AI to enhance their products and services, leading to increased user engagement and revenue generation.

Regarding the impact this will have on the digital OOH industry, he said: “AI enables personalized recommendations, targeted advertising, improved search algorithms, and provides a better user experience. These companies are investing heavily in AI research and development. AI is expected to continue to drive growth this year due to the growing presence of AI The impact of AI will be experienced across all media channels, including the digital OOH industry For DOOH, real-time audience analytics, dynamic It enables advanced content optimization, automated ad placement, and contextual targeting to enhance campaign effectiveness, personalization, and maximize ROI for advertisers and brands.”

MiQ India, China, SAARC Managing Director Siddharth Dabhade says AI-powered personalization is a game-changer for big tech companies. “We have achieved high consumer engagement and loyalty by using AI algorithms to analyze user behavior, preferences and interactions. Brands can personalize their products and create a better user experience. By developing cutting-edge products and services, AI is also helping big tech companies create new revenue streams: Google, for example, uses AI to develop new advertising products. , while Microsoft is using AI to develop new services in industries such as healthcare, finance, and education.”

“Overall, AI is becoming an increasingly important factor in the growth of large tech companies. It will be,” added Dabhade.

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