Microsoft has been a leader in the development of generative AI, with its spending efficiency in this area approaching the level it reached during the fourth or fifth year of Azure development, according to analysts at Goldman Sachs. Despite only recently rolling out generative AI initiatives, Microsoft has been able to balance the increase in spending with tangible revenue from AI projects. Analysts believe that concerns about declining gross margins may be exaggerated, as AI-related spending could potentially contribute over $25 billion in revenue this year.
Furthermore, Microsoft is expected to achieve critical scale in capital spending for AI much quicker than it did with Azure, possibly within the next two to three years. This progress is reflected in the company’s stock performance, with shares increasing by 0.5% in morning trading.
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https://seekingalpha.com/news/4118979-microsofts-gen-ai-spending-efficiency-nearly-equal-late-azure-build-out-goldman
