The AI Race Is Being Led by These Three Companies

Since ChatGPT launched, generative AI technology has shown its power, and tech businesses are racing to use it to improve customer service and operations. The "Magnificent Seven" and other investors have seen this tendency, driving tech stocks up since 2023.  

1. Nvidia It's hard to discuss generative AI without Nvidia. GPUs—the most important infrastructure for executing AI models like ChatGPT—have been at the center of the AI revolution for the company.  

It paid off for Nvidia to establish its AI skills and partner with OpenAI years ago. The company has an estimated 98% market dominance of the data center GPU industry, and its technological leadership and rising component demand have caused a scarcity and given it considerable price power.  

Nvidia's new findings explain why its stock has risen more than 400% since 2023, making it the world's third-most valuable business behind Microsoft (NASDAQ: MSFT) and Apple. Data center sales rose 409% to $18.4 billion, boosting fourth-quarter revenue 265% to $22.1 billion. Its GAAP net income rose 769% to $12.3 billion, giving it a profit margin above 50%. Nvidia's growth may decrease, but its AI dominance should keep it ahead.  

2. MS Nvidia leads AI hardware, but Microsoft leads AI software. Microsoft is deploying AI capabilities across numerous product lines due to its $13 billion agreement with OpenAI and diversification across multiple tech platforms.  

Microsoft's AI Copilot chatbot is available in Azure cloud computing, GitHub code repository, Microsoft Office, and Bing search engine, among others, thanks to OpenAI. Those efforts are already affecting business. In its most recent quarter, management said AI contributed six points to Azure's 30% sales increase.  

Microsoft won't slow down either. The startup just hired DeepMind co-founder Mustafa Suleyman, an AI expert. It also employed numerous Inflection AI personnel after the startup dissolved. Microsoft and CEO Satya Nadella have invested heavily in AI and will continue to explore new applications.  

Alphabet, a leader in AI, deserves recognition despite receiving less attention than Nvidia or Microsoft. Alphabet has invested in AI for years, like Microsoft. The business bought DeepMind in 2014 and combined it with Google Brain. Over the past decade, it has developed its own AI technology.  

Alphabet has been less aggressive than Microsoft in AI, but Bard, its chatbot, responded fast to ChatGPT. Gemini may be ChatGPT's closest competitor. Alphabet's Waymo investments are also noteworthy. Now transporting passengers in San Francisco, Phoenix, and Los Angeles, Waymo appears to be the frontrunner in self-driving cars, which have mostly failed.  

Google employs AI to improve YouTube and Google Search results and Google Cloud operations. Alphabet, like Microsoft, is betting big on AI and intends to lead the industry.  

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