Here are the takeaways from today’s Morning Brief, which you can register to receive every morning in your mailbox accompanied by:
Investors were treated to two different versions of artificial intelligence this week. And both sound pretty good.
Microsoft (MSFT) announced a partnership with Coca-Cola (KO) in which the soft drink king would pay $1.1 billion to “jointly experiment” with Microsoft’s new Azure AI-based version of its software suite cloud-based productivity.
And when Microsoft’s quarterly results showed that AI was increasingly driving growth in its cloud business and bullish forecasts from an enthusiastic management team, the stock rose 2% on Friday.
Alphabet (GOOG, GOOGL) had a similar story, but with a stronger investor reaction – up 10% on Friday – as investors reconsidered the company’s second place behind Microsoft. Today, it appears that YouTube, search, and cloud computing companies are ready to embrace AI.
On the other side of the table was Tesla’s (TSLA) earnings presentation. The company has stepped up efforts to offer fully autonomous vehicles, a fleet of robo-taxi, license self-driving technology to other automakers – they are in conversation, Elon Musk said – and the potential to harness the AI computing power of parked Teslas to create something. similar to Amazon’s AWS, a bold but old idea floating around around since the 1980s.
These are two very different visions of the future of AI. “Productivity software” certainly doesn’t have the same ring to it as Peter Thiel’s “robotaxi,” which is on the fun side of the “we wanted flying cars, instead we got 140 characters” spectrum that we discussed here two weeks ago.
But as our chart of the week shows, investors liked both.
And they should do it. Tesla’s rise was partly intended to refute some reasonable investor fears – cutting costs to cope with slowing demand and reaffirming that cheaper electric vehicles are on the way. But the bigger story was the great visionary’s vision of autonomous AI.
It’s rare, and that’s why some people love Elon. For the most part, the path to AI runs first through the tedious world of programmatic advertising and productivity tools, the core businesses of today’s big players in AI software and the cloud – Google, Microsoft and Meta .
On the other hand, the bright future of Tesla’s consumer cars and autonomous robot taxis is far more aligned with the expectations (aspiration, really) of Big Tech to “change the world” than with the reality of a “better Office 365” that we see so often.
But these more mundane improvements are everything. It’s important to remember the lessons that any regional American city will teach you: Tons of wealthy Americans have simply taken the practical route, turning to the less glamorous pursuits of fast-food franchising, agricultural processing, from waste management, car dealerships, commercial properties, not to mention all the other B2B things you would never think twice about. For every Zuckerberg, there are thousands Boyfriend…
