“Microsoft has the scale advantage of being able to offer AI as a co-pilot in platforms like Outlook and Word. It would be more expensive to bring this technology into search, but I could envision a scenario where the net profit would come from running more relevant ads on our core products, so I would use them. I don’t rule it out.”
Theo Maas, a portfolio manager at Northscape Capital, said AI is attractive to all companies, but the return on investment that management achieves will be a big factor in determining the potential returns for shareholders.
Maas said all consumer and enterprise software companies face the challenge of implementing enhancements without inflating costs.
“It costs a lot to operate all these models,” he said. “Even a simple Google search costs 5 to 10 times more than a ChatGPT search because of the computing that runs in the background. It’s not a traditional software-as-a-service (SaaS) model because it’s more expensive, so we need a subscription revenue stream and a consumption or usage revenue stream.”
Adobe, Salesforce, Camber
Giants such as $200 billion ($302 billion) customer relationship management platform Salesforce and $173 billion graphic design business Adobe are already following Microsoft in deploying AI as a co-pilot for their users. .
In March, Sydney-based Canva launched several new AI-powered design tools under the designer’s motto of empowering users.
Canva’s Cliff Obrecht and Melanie Perkins.
“These companies will get more profit than Microsoft. [smaller] But in the end it all comes down to how well we introduce the new pricing model to our customers,” Maas said.
“If consumers and businesses are accustomed to paying $10 a month, how do you explain them to start paying for what they already use? And all tech companies suffer from it.”
Maas suggested that Salesforce and Adobe are undervalued in the market and that’s an opportunity for investors. Adobe also competes in the AI space with IPO candidate Canva, which is valued at around $25 billion.
“Canva has the advantage of being built from the ground up, so it’s a fresh code base, not 30 years old like Adobe,” Maas said. “And Adobe took this opportunity to try and buy it. [advanced AI business] figma [for $US20 billion]”
prepare for change
To prove the value AI pioneers create for themselves, ChatGPT’s parent company OpenAI doubles its value to $29 billion from 2021, and wins $10 billion investment from Microsoft in January Did.
But Nvidia is the first headline maker and main winner from AI, with its Nasdaq-listed stock rising 375% in five years to reach a valuation of US$663 billion.
Maas said NVIDIA’s graphics processing unit was a workhorse in AI, and the company held a sizable lead over rivals AMD and Intel.
But the technology investment veteran said Northscape’s recent sale of NVIDIA shares was because the stock was “hugely overvalued,” at about 60, compared to 30 times this time last year. It warned that it was trading at double profits.
Business leaders, including Elon Musk and Apple co-founder Steve Wozniak, have called for a six-month moratorium on AI development in advanced fields in March, amid concerns over the AI buzz. signed an open letter.
The concern is that if machines become too intelligent in Hollywood-style scenarios, they could prove dangerous to humans. terminator 2, However, the race to develop AI has not slowed down.
Google announced on April 21 that it will update its AI chatbot, Bard, to rival ChatGPT, allowing users to write code and develop software.
“It’s hard to find software that can’t use AI in some way,” Maas said. “The main issue is the size of the user base. When you have millions of users, it is easy to justify the cost of AI integration. Integrate it into the product and you’ll be fine.”
In the AI software space, Rice said he likes Nasdaq-listed science and medical simulation software developers Schrödinger and Ansys. Despite a tough market for tech investors, both market darlings have posted positive stock returns over the past 12 months.
ASX includes established companies investing in AI with strong long-term track records, such as software players WiseTech, Xero and Technology One. Online advertising giant Seek and his REA Group are using the technology to improve ad targeting and more accurately match buyers and sellers.
Numerous other exchange-traded funds offer exposure to the subject, such as product providers Global X and iShares letting investors buy baskets of AI businesses.
From a broader perspective, Australian banks, supermarkets, retailers, airlines, miners and healthcare companies are also looking at ways to adjust their workflows and improve their services as the revolution ripples through the market. I’m here.
