4 ms·

Amazon and Apple are a bit different, but Nvidia and Microsoft are purely seen as 'AI' play (MSFT through Open AI) as far as I know. Google indirectly profits

Amazon and Apple are a bit different, but Nvidia and Microsoft are purely seen as 'AI' play (MSFT through Open AI) as far as I know. Google indirectly profits from that too.

nl 3y ago
Google is the OG AI company too. And Google's rally corresponded to their very successful set of announcements in the AI space at Google IO (and also a profit expectation beat to be fair).
- astrange 3y ago
  Successful announcements doesn't make an AI company, paying customers do. In zero interest rates you can instead make investor hype your product so they increase the share price, but it doesn't work forever.
  - nl 3y ago
    > Successful announcements doesn't make an AI company, paying customers do. Yep. Like a neural network powered search engine, right? > In zero interest rates you can instead make investor hype your product so they increase the share price, but it doesn't work forever. As this article points out, investors believe.
    - astrange 3y ago
      > Yep. Like a neural network powered search engine, right? They've already got that - it's those text snippets. They're quite unreliable, so a reliable one would be different of course. But Google doesn't get paid to provide search results, they get paid to show ads you click on. It doesn't seem to me this is the same product as AI that shows you text summaries of search results. Worse, if you mine all the content out of search results instead of making users click on them, why will people even make new webpages for you to show in the results?
      - nl 3y ago
        > They've already got that - it's those text snippets. I actually meant the neural ranking of results, and the selection of ads for result sets.
AnthonyMouse 3y ago
Microsoft is a huge conglomerate and the vast majority of their revenue has nothing to do with AI. Moreover, they have a partnership with OpenAI, but it's not at all clear that their lead is going to stick long enough to turn it into anything. Everybody is doing research on this now and all it takes is for somebody else to do it better. Nvidia's rise is much more directly tied to this.
- TheAlchemist 3y ago
  Unfortunately, the current state of the market has nothing to do with research - it's pure bubble ! (for AI stocks)
  - paxys 3y ago
    If you look at the profits these companies are making - with ~zero of it coming from AI products at the moment - the valuations are in fact conservative.
    - TheAlchemist 3y ago
      How do you define conservative ? By historical standards, current P/E ratios are extremely high - especially for companies of this size.
      - paxys 3y ago
        P/E ratios of Google, Apple, Microsoft are all in the 25-30 range, which is not abnormally high. Amazon's P/E has always been wonky because it rarely posts high profits. Nvidia is the current outlier, and I think everyone is in agreement that it is entirely fueled by AI hype.
  - deleted 3y ago
    [deleted]
- huijzer 3y ago
  chat.openai.com has about 2B visitors per month with an average visit duration of 7 minutes (https://www.similarweb.com/website/chat.openai.com/ https://www.similarweb.com/website/chat.openai.com/). It is not unreasonable to expect that every visit costs OpenAI about $0.10 dollars; which they pay directly to Microsoft. In effect, this means that Microsoft's revenue is 200 million per month or 2.4B per year if this continues like this. That's already equal to 1% of Microsoft's total revenue of 2022. Note that this is chat.openai.com only but I can imagine that the API also has quite some traffic. Oh and wait, on top of this Microsoft has a 49% ownership of OpenAI and OpenAI is still the best LLM in town, so it's not unreasonable to expect further growth. > [...], but it's not at all clear that their lead is going to stick long enough to turn it into anything People are saying that since January, but here we are in July and GPT-4 is still the best model. While everybody is catching up, they have (1) the processes in place to come up with new ideas and get them working (2) a head-start of many months (note that GPT-4 was basically done in Sep 2022).

Amazon and Apple are a bit different, but Nvidia and Microsoft are purely seen as 'AI' play (MSFT through Open AI) as far as I know. Google indirectly profits from that too.

nl 3y ago

Google is the OG AI company too. And Google's rally corresponded to their very successful set of announcements in the AI space at Google IO (and also a profit expectation beat to be fair).

astrange 3y ago
Successful announcements doesn't make an AI company, paying customers do. In zero interest rates you can instead make investor hype your product so they increase the share price, but it doesn't work forever.
- nl 3y ago
  > Successful announcements doesn't make an AI company, paying customers do. Yep. Like a neural network powered search engine, right? > In zero interest rates you can instead make investor hype your product so they increase the share price, but it doesn't work forever. As this article points out, investors believe.
  - astrange 3y ago
    > Yep. Like a neural network powered search engine, right? They've already got that - it's those text snippets. They're quite unreliable, so a reliable one would be different of course. But Google doesn't get paid to provide search results, they get paid to show ads you click on. It doesn't seem to me this is the same product as AI that shows you text summaries of search results. Worse, if you mine all the content out of search results instead of making users click on them, why will people even make new webpages for you to show in the results?
    - nl 3y ago
      > They've already got that - it's those text snippets. I actually meant the neural ranking of results, and the selection of ads for result sets.

AnthonyMouse 3y ago

Microsoft is a huge conglomerate and the vast majority of their revenue has nothing to do with AI. Moreover, they have a partnership with OpenAI, but it's not at all clear that their lead is going to stick long enough to turn it into anything. Everybody is doing research on this now and all it takes is for somebody else to do it better. Nvidia's rise is much more directly tied to this.

TheAlchemist 3y ago
Unfortunately, the current state of the market has nothing to do with research - it's pure bubble ! (for AI stocks)
- paxys 3y ago
  If you look at the profits these companies are making - with ~zero of it coming from AI products at the moment - the valuations are in fact conservative.
  - TheAlchemist 3y ago
    How do you define conservative ? By historical standards, current P/E ratios are extremely high - especially for companies of this size.
    - paxys 3y ago
      P/E ratios of Google, Apple, Microsoft are all in the 25-30 range, which is not abnormally high. Amazon's P/E has always been wonky because it rarely posts high profits. Nvidia is the current outlier, and I think everyone is in agreement that it is entirely fueled by AI hype.
- deleted 3y ago
  [deleted]
huijzer 3y ago
chat.openai.com has about 2B visitors per month with an average visit duration of 7 minutes (https://www.similarweb.com/website/chat.openai.com/ https://www.similarweb.com/website/chat.openai.com/). It is not unreasonable to expect that every visit costs OpenAI about $0.10 dollars; which they pay directly to Microsoft. In effect, this means that Microsoft's revenue is 200 million per month or 2.4B per year if this continues like this. That's already equal to 1% of Microsoft's total revenue of 2022. Note that this is chat.openai.com only but I can imagine that the API also has quite some traffic. Oh and wait, on top of this Microsoft has a 49% ownership of OpenAI and OpenAI is still the best LLM in town, so it's not unreasonable to expect further growth. > [...], but it's not at all clear that their lead is going to stick long enough to turn it into anything People are saying that since January, but here we are in July and GPT-4 is still the best model. While everybody is catching up, they have (1) the processes in place to come up with new ideas and get them working (2) a head-start of many months (note that GPT-4 was basically done in Sep 2022).