At its Build conference this week, Microsoft (MSFT) announced Copilot+ PCs, designed to integrate artificial intelligence capabilities into its computers. Rishi Jaluria, software stocks analyst at RBC Capital Markets, and Frederick Havemeyer, head of US AI and software research at Macquarie, join Market Domination to discuss the company’s latest AI project. ‘business.
“I think the introduction of these AI PCs is actually going to be a game changer for putting generative AI in the hands of all knowledge workers,” says Jaluria. He adds that users will be able to use these small and medium language models locally, generating increased use of AI for general purposes. When it comes to large language models, Havemeyer says: “It’s very clear to us that the technology of a generative AI model of large language models is something that will resonate with consumers over time. ChatGPT has done it, and I think with the right interface and platform, we will find it in time.”
AI is permeating every industry as businesses seek to innovate and become more efficient. “80% of CIOs tell us they are currently in production or planning to be in production with AI in the next 12 months. So the appetite is real, the use cases are real,” explains Jaluria, adding that there is still much to be done. there is plenty of room for the technology to grow.
For more expert insights and the latest market action, click here to watch this full episode of Market Domination.
This article was written by Mélanie Riehl
Video transcription
Microsoft is focusing on AI.
The company this week announced a new category of P CS called Copilot as well as its computers equipped with PC AI chips and will now run on the open model A is GP T +40.
So, as software technology continues to advance, we look at how to get the big picture and the best ways to position your portfolio with the Yahoo Finance playbook.
We welcome Rishi Juria R BC Capital Market, Software Equity Analyst, as well as Frederick Havemeyer, Head of USA I and Software Research at Macquarie.
Gentlemen.
Thank you very much for being here, I guess let’s start first with the Microsoft announcement itself and how we should think about it as investors, how big the deal will be, in how much it will gradually add to revenue, etcetera, A. I’ll start with you.
Yeah, absolutely.
And thank you very much for having us.
We were just in Seattle for the Microsoft build this week and look, I think the introduction of these AI PCs is actually going to be a game changer for putting generative AI in the hands of all knowledge workers.
RIGHT.
Remember that when using any type of GP T system today, it requires a fast internet connection and a lot of computing power.
Now, you know, it’s going to, it’s going to take a while, you know, they become lightweight enough that everyone can use them, but you will be able to use some of these smaller and medium language models locally without a super internet connection. -fast.
And I think that will allow for a lot more general uses.
Um, AI use cases and workloads that didn’t exist before.
So I think this is a very exciting announcement for Microsoft, Fred.
Let us bring you here too.
Same question Fred.
So you know your reaction to this Microsoft event, you know, Rishi says these new A IP CS are a game changer, Fred, do you agree?
So over the last year, we’ve been constantly emphasizing that AI is going to have to move to the edge, to the device.
And in many cases, it requires hardware like what Microsoft deploys to do it.
And that’s what would motivate us to both make this successful with consumers and knowledge workers, and also be able to drive adoption of AI in a cost-effective way.
Because if you remember, I think one of the last times I was on Yahoo Finance, we had a good time talking about what smaller language models mean. Large language models still quite large but nevertheless smaller mean margins.
And as we have discovered in the past, we believe that achieving gross margins of over 80-90% running generative AI models can be achieved using small language models on specialized hardware or on local devices.
So I think it’s pretty exciting, Fred just followed up on that, you wrote a recent note on how consumers are going to determine the impact here.
And I’m still trying to understand if we’re still in the AI cycle, or if it’s starting to be pulled.
In other words, as all this comes out, customers, especially on the retail side, are asking for this or that company, always faced with the need to convince them that they want it.
I think when we look at products like Chat G BT, we already see that there are over 100 million users who I would characterize in many cases as consumers who are really interested in these types of products.
Now we have to market it and make it something useful and interesting for consumers.
I think there are technologies that are perhaps what you describe as a solution in search of a problem.
And at the same time, I think it’s very clear to us that the generative AI model technology of large language models is something that we find suitable for consumers over time.
Cat GP T did it.
And I think that with the right interface and the right platform, we will get there over time.
I mean I use Meta’s Rayban glasses, not here to discuss Meta but just glasses.
They are fascinating.
They’re really good and I really like having this modality of working with these AI models sitting right in my glasses.
So we’ll see over time.
Richie.
Same question.
I mean, when you look at your coverage universe, Richie, what kind of customer adoption and engagement are you seeing around, you know, these new AI products and features?
Yeah.
Um, absolutely.
And I’m glad you have me on Fred’s side because I definitely agree with him on a lot of what he says.
Um Listen, what I would say is when we talk to businesses, we talk to Cio S CTO S managers.
There is a real appetite for the use of AI within businesses.
A lot of that, I would say maybe 70% is actually net new budget.
So it’s not even a question of cannibalizing other parts of it.
It comes from other parts of the organization.
Um, so there’s some real money that’s set aside.
Um, we’re, we’re seeing, I would say 80% of Cio S’s are telling us that they’re currently in production or they expect to be in production with AI in the next 12 months.
The appetite is therefore real.
The use cases are real.
And remember, we’re still in the very early stages.
If I make an analogy with Internet scenes, you know, even though the GP T 40 is incredibly powerful, it’s probably a connection level of 14.4, right?
We haven’t even reached broadband.
So I think there’s still a long way to go for the technology to progress from here, but we’re already seeing real interest from businesses and consumers.