Craig Martell, the Defense Department's chief digital and artificial intelligence (AI) officer, is reportedly "scared to death" about the potential for AI to be used to spread disinformation and for other nefarious aims. Warren Buffett recently likened AI to the creation of the atomic bomb and its associated dangers. Geoffrey Hinton, known by some as one of the "godfathers of AI," warns that AI could be a more urgent threat than climate change.
Perhaps unsurprisingly, given these and other warnings from prominent figures, thousands of technologists (including Elon Musk) have called for a six-month pause on the development of the most powerful AI systems due to their "profound risks to society and humanity." The pause would offer an opportunity to consider appropriate regulations regarding how AI is used.
Still, many others are convinced that AI has the potential to have a profoundly positive impact on society. Bill Gates thinks AI is the most important technological development in decades, one that is "as fundamental as the creation of the microprocessor, the personal computer, the internet, and the mobile phone." Meanwhile, Ark Invest CEO Cathie Wood expects AI to more than quadruple the productivity of knowledge workers by the end of the decade.
Regardless of whether you're more intrigued by the potential benefits or risks of this transformational technology, one thing is nearly certain: Demand for AI solutions is set to boom.
Image source: Statista.
Here are two companies that are positioned to lead this rapidly expanding global market -- and deliver handsome rewards to their investors.
1. Microsoft
No discussion of AI stocks is complete without mention of Microsoft (MSFT 1.65%). The tech titan became a powerful force in AI thanks, in part, to its multibillion-dollar investment in ChatGPT-maker OpenAI.
Microsoft has worked feverishly to integrate OpenAI's cutting-edge technology into its products and services. From its popular suite of productivity software to its recently upgraded Bing search engine, the company's offerings have received a host of AI-powered improvements.
Additionally, Microsoft's Azure cloud infrastructure platform is set to profit from the rapid adoption of AI. Morgan Stanley analyst Meta Marshall sees AI rising to 9% of total cloud spending over the next three years, up from 3% today. Thanks to its AI expertise, Marshall expects Microsoft to be a prime beneficiary of this trend. In all, she believes the overall cloud market could grow to a whopping $18 trillion over the long term.
2. Amazon
Microsoft has grabbed headlines, while Amazon's (AMZN 1.30%) AI-related moves have met with a more subdued response from investors. That's a mistake. The e-commerce and cloud computing giant intends to be a major player in the AI arena, and it's well-positioned to compete and win.
Machine learning, a branch of AI that uses data, algorithms, and pattern recognition to grow more accurate over time, is in Amazon's DNA. Amazon uses machine learning to deliver more relevant product recommendations to shoppers on its e-commerce sites, as well as to make its fulfillment network more efficient. The online retail leader also deploys the technology to serve up high-performing ads for its merchants.
Moreover, Amazon is investing aggressively in generative AI. Customers can use its new cloud-based service, Bedrock, to create their own AI applications. To help its clients do so cost-effectively, Amazon offers custom-designed chips that make it significantly less expensive to run AI apps on its AWS cloud computing platform.
These tools should allow Amazon to capture a sizable share of AI-driven spending in the coming years. Generative AI is "going to be a big deal for customers, our shareholders, and Amazon," CEO Andy Jassy said in his recent letter to shareholders.
