Management teams are working through 2024 operating budgets and hopefully have figured out that interest rates will remain elevated for 2024. Companies carrying meaningful debt have no choice but to assume elevated interest will remain for the foreseeable future (we believe a 5 handle makes sense for the 10-year). In terms of the People budget, … Continue reading 2024 Enterprise Software Budgets: Gen AI To Get Axed?
Tag: machine learning
Should OpenAI file for an IPO this year or next, the questions to ask are: 1.) What percentage of OpenAI's revenue is recurring? 2.) What are customer renewal rates? My push back on OpenAI's rumored $1 billion revenue run rate is that much of that revenue is tied to companies that are experimenting with Gen … Continue reading What Percentage of OpenAI’s Revenue Is Recurring?
Will MSFT Copilot succeed where the company's first AI-powered assistant - Cortana - failed? Microsoft recently released a Cortana update which winds down the app in Windows 11. If you recall, Cortana failed to compete with Google Assistant and Amazon Alexa. Copilot will be released across Windows 11 and will integrate with Bing Chat and … Continue reading Will Microsoft Copilot Succeed Where Cortana Failed?
Sure, Palantir (ticker: PLTR), is a fine Info Services company with a predictive analytics platform at its core. However, given the heavy nature of its customer deployments, PLTR can't scale the way AWS, Azure and GCP scale. In fact, Palantir sits on top of AWS, Azure and Google Cloud. So, what are investors so excited … Continue reading More AI Madness
One would expect Amazon's AWS business to slow when the company reports earnings this Thursday August 3rd. Our position on the Big 3 (AWS, Azure, GCP), is unchanged since January (read that article HERE). AWS revenue growth will slow as a result of fewer startup creations and headcount reductions over the past year combined with … Continue reading Amazon Reports Thursday. Here Are Our Thoughts On AWS.
Some of the hyperbole that I hear around AI - Generative AI in particular - simply does not make any sense. For example, one of the things I hear from the Financial Media is that AI will help facilitate a soft landing. How so? AI can't create demand out of thin air. Reducing the cost … Continue reading AI Can’t Create Demand Out of Thin Air
Microsoft (ticker: MSFT) added $116 billion to its market cap yesterday as it announced that MSFT 365 users would be required to pay an additional $30 per month to use the AI-enhanced version of its productivity apps - Copilot. We wrote about Copilot back in March (HERE). Yes, AI-enhanced productivity applications by Microsoft and Google … Continue reading AI and Equity Dilution During Bubble Times
A look at Google Trends suggests that "Generative AI" may be losing its luster - at least insofar as the Google search term "Generative AI" is concerned. When measured over the past 90 days, the search term peaked on June 6th (see Google Trends chart below). Source: Google Trends Source: Google Trends
Now that Microsoft (ticker: MSFT) has received approval to acquire Activision (ticker: ATVI, better luck next time Lina Khan), I am curious as to what kind of operating leverage Activision may enjoy as Generative AI is deployed more deeply throughout the organization post-deal close. Video game publishers have been using AI for years to render … Continue reading Generative AI Across Activision Post-Deal Close
Advanced automation / AI offers a real customer value prop. AI has been deployed for decades. However, the hype around Generative AI is a different beast. It will take decades for Generative AI to generate the Economic Value required to justify the valuation run enjoyed by companies such as Nvidia (NVDA shares up 280% since … Continue reading Generative AI Hype vs. Reality