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Microsoft (MSFT) and OpenAI Discuss Structural Changes Amid Transition to For-Profit Model

We recently compiled a list of the 10 AI News That You Should Not Miss. In this article, we are going to take a look at where Microsoft Corporation (NASDAQ:MSFT) stands against the other AI stocks.

Generative AI Set to Capture 10% of Total IT Market by 2032

Bloomberg Intelligence projects that the generative AI market will grow at a compound annual growth rate (CAGR) of 42%, reaching $1.3 trillion by 2032, up from $40 billion in 2022. This growth is driven by demand for generative AI products, especially infrastructure for training large language models, digital ads, and specialized software. The market could generate an additional $280 billion in software revenue, with major companies like Amazon, Microsoft, Google, and Nvidia expected to benefit as enterprises increasingly move workloads to the cloud.

By 2032, generative AI is predicted to account for 10% of total IT spending, with significant revenue coming from infrastructure services, AI servers, and software. The technology is also expected to have a transformative impact on life sciences and education. However, the rapid growth of generative AI could disrupt several industries, including semiconductors, hardware, IT services, and advertising.

READ ALSO: 11 Trending AI Stocks on Latest News and Ratings and Jim Cramer Talked About These 8 Stocks.

Navigating the Evolving Landscape of Generative AI

In a blog post, Carrie Tharp, Vice President, of Strategic Industries, wrote that Generative AI has evolved from a futuristic concept into a vital business strategy, transforming industries by enhancing efficiency and customer engagement. Despite its growth, many organizations are still testing its applications, with a study revealing that a third of businesses are evaluating its use. Key trends include the rise of multimodal AI, AI agents, AI-powered search, customer experiences, and deepfake defense.

In retail, AI is being used for customer service, marketing, and digital commerce, with long-term goals of creating personalized experiences and AI-powered assistants. The financial services industry is leveraging AI for fraud detection, risk management, and efficiency, while healthcare uses AI to reduce administrative burdens and improve patient care. The media and entertainment industry is increasingly adopting AI to improve productivity, content personalization, and operational efficiency.

As AI becomes more sophisticated, businesses need to address challenges like deepfake defense while focusing on high-value use cases. Generative AI is no longer a novelty but a transformative tool, with businesses needing to prioritize AI strategies that align with their specific industry needs and long-term goals.

For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

A development team working together to create the next version of Windows.

Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 279

Microsoft Corporation (NASDAQ:MSFT) incorporates AI across its cloud services, productivity tools, and business solutions to improve automation, security, and overall user experience. Its AI initiatives span advanced cloud offerings, AI-driven business software, and innovative language processing and computing technologies.

According to The Information, OpenAI and Microsoft (NASDAQ:MSFT) have been in discussions regarding changes to OpenAI’s structure as it plans to transition from a nonprofit to a for-profit entity since October. The talks focus on Microsoft’s potential equity stake, its role as OpenAI’s exclusive cloud provider, the duration of Microsoft’s rights to use OpenAI’s intellectual property, and whether it will continue to receive 20% of OpenAI’s revenue. These discussions highlight tensions over cloud services and governance as OpenAI plans to shift to a for-profit model under CEO Sam Altman.

Overall MSFT ranks 2nd on our list of the AI stocks you shouldn’t miss. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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