Microsoft’s ‘iPhone Moment’ Could Come From AI

Will artificial intelligence (AI) give Microsoft its “iPhone moment?”

A recent note by Wedbush Securities’ Dan Ives — the subject of a Seeking Alpha report on Sunday (April 7) — argues that the Redmond, Washington, company is among several tech giants expected to benefit from recent AI investments the next time they report earnings.

As the report noted, Microsoft is seen as perhaps the biggest beneficiary of spending on AI, due to its close ties to OpenAI, with the technology helping drive the company’s market capitalization to north of $3 trillion.

“We strongly view this as Microsoft’s ‘iPhone Moment’ with AI set to change the cloud growth trajectory in Redmond the next few years and our recent checks giving further confidence in this dynamic for the March quarter,” Ives said.

He added that the last month has seen an acceleration of adoption for generative AI and Microsoft’s Copilot activity which has helped Azure cloud deals. Ives argued that for every $100 in cloud Azure spending over the past few years, there could be up to $35 to $40 of additional AI spending ahead.

Meanwhile, PYMNTS wrote last week about Microsoft and OpenAI $100 billion data center project, which involves an AI supercomputer named “Stargate,” set to launch in 2028.

Experts say this effort could create advanced, human-like language models that understand context, emotions and nuance, potentially revolutionizing AI and commerce, in areas such as personalized marketing and supply chain optimization.

“It is important to consider the potential impact on jobs and the workforce,” Jiahao Sun, founder and CEO at FLock.io, a platform for decentralized AI models, said in an interview with PYMNTS.

“As AI becomes more capable in multimodal and integrated into commerce, it may automate industries that currently cannot easily be transferred into a “chatbot” interface, such as manufacturing, healthcare, sports coaching, etc.”

The Stargate project is expected to exceed the cost of the biggest data centers to date, and represents the most substantial endeavor in a series of supercomputers envisioned by Microsoft and OpenAI.

The scale of the data center effort could speed the development and deployment of large AI models, Sun told PYMNTS. These models have the potential to develop more human-like language models and upgraded computer vision systems.

“Sun even suggested that such advancements could lead to the creation of intelligent machines that can understand context, emotions and nuance, accurately perceive and interpret complex visual scenes, and interact with the world in ways that closely resemble human cognition,” the report said.