Microsoft recently said it would bring AI integration to its suite of Office products.
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Worried about the potential for artificial-intelligence systems to outrun the human brain? Relax and invest in Microsoft. That’s the advice from
J.P. Morgan.
The rapid progress in AI has become a controversial topic, with the recent launch of a letter signed by Elon Musk and a number of AI researchers calling for a pause in training more powerful systems. The letter specifically called out GPT-4, the latest generative AI technology released by ChatGPT’s developer OpenAI, which is backed by Microsoft (ticker: MSFT).
J.P. Morgan agrees about the technology’s potential, if not the conclusions drawn by the letter writers.
“We reiterate our belief that generative AI is likely to be one of the defining technological developments of our generation, with Microsoft a clear early leader and potential to achieve escape velocity,” analysts at J.P. Morgan, led by Mark Murphy, wrote in a research note.
The analysts were assessing the situation after a conversation with Dharmesh Kakadia, formerly an AI engineer at
Microsoft.
Key points from the conversation bolstering the bullish view for the analysts were Microsoft’s edge in bringing AI products to market compared with Google and its parent company
Alphabet
(GOOGL), as well as other rivals, based on its scale and distribution capacity.
They also pointed to Microsoft’s broad portfolio of products, which could benefit from AI integration, and the importance of having sources of proprietary data to train AI systems on.
“We…believe that we are only in the earliest innings of AI and that its impact will affect all layers of the modern software stack, with Microsoft’s early success serving as a model,” the analysts wrote.
J.P. Morgan has an Overweight rating and $305 target price on Microsoft stock. Microsoft shares were down 0.2% at $286.75 in premarket trading on Wednesday.
Write to Adam Clark at [email protected]
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