The news that Microsoft ( NASDAQ:MSFT ) will spend $10 billion to acquire a 49% stake in ChatGPT is viewed negatively by Alphabet ( NASDAQ:GOOGL ). The AI chatbot service does not pose as much of a threat to Google as many believe. My investment thesis remains extremely bullish on Google stock , which is trading near $90, due to concerns that an AI chatbot will disrupt their main business.
Microsoft Makes a Significant Investment
The software giant is planning to invest up to $10 billion in OpenAI to acquire the promising AI chatbot technology. The deal is intriguing in that Microsoft appears willing to pay a $29 billion valuation for only 49% of the business, even though the tech giant will receive 75% of profits until the investment is repaid.
The agreement is unusual in that Microsoft will not control the business but will maintain the AI technology on their cloud services. While many analysts believe Google search is in grave danger, many technology leaders continue to issue tweets like the one below, emphasizing the severe limitations of AI chat services.
When ChatGPT can’t even provide the current leader of Twitter and the timing of the CEO change, Google search appears to be safe. Other queries indicate that the AI chatbot cannot report the World Cup winner because it was trained using older data.
Because the service cannot search the web for answers, ChatGPT is severely limited in its current form. Google has its own AI voice services that can be integrated into Google search, but OpenAI would need to provide a search function that can search the internet for answers to replace what the search giant cu...
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