The era of artificial intelligence (AI) has begun. AI is set to disrupt enormous markets, while creating entirely new industries and turbocharging others. It will be the worst of times for some -- and the best of times for many.
Amid this economic upheaval, one thing is nearly certain: The businesses that lead the world into the coming age of AI stand to deliver fortunes to their shareholders.
Here are three companies that are well positioned to do just that.
Microsoft
Microsoft (MSFT 0.68%) has become a powerhouse in the AI arena, due largely to its multibillion-dollar investment in ChatGPT-creator OpenAI. It was a brilliant move that placed the software colossus at the forefront of the generative AI race.
NASDAQ: MSFT
Key Data Points
Generative AI uses machine learning to identify the patterns within a data set. The technology can be used to generate many forms of novel content, including text, images, and audio.
Microsoft has moved quickly to integrate OpenAI's highly regarded tech into its products and services. AI should make Microsoft's popular productivity tools even more valuable to the over 1 billion people who use them. Microsoft also plans to use an AI-powered version of its Bing search engine to wrestle away lucrative search engine market share from Alphabet's Google.
Better still, AI might have an even more profound impact on Microsoft's cloud computing business. The tech giant's Azure cloud infrastructure platform is currently the second-largest provider of cloud services in the world. It's a huge and rapidly expanding market that's set to exceed $1.5 trillion by 2030, up from $484 billion in 2022, according to Grand View Research. Moreover, some analysts believe Azure could eventually claim the No. 1 spot among cloud platforms, thanks to Microsoft's AI expertise.
Amazon
Microsoft's ascent to the cloud throne is not assured, however. Amazon (AMZN 1.43%), the current cloud king, intends to defend its place atop this booming industry.
To do so, Amazon is taking a different approach than its rival. Instead of focusing on a small number of massive AI models, such as those provided by OpenAI, Amazon is making a wide range of models from an array of providers available to its customers. The cloud leader's AI partners include fast-growing tech start-ups Stability AI, Hugging Face, and Anthropic, among others.
NASDAQ: AMZN
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Amazon also recently debuted its own Titan family of models, which will be exclusively available to clients of its new AI service, Bedrock. Bedrock is designed to help Amazon Web Services customers more easily build, operate, and grow generative AI applications.
"We believe that customers are going to need a lot of different generative AI models for different purposes, and it is unlikely that any one model is going to serve all customers or even all the needs of one customer," Amazon Web Services CEO Adam Selipsky said during an interview with The Wall Street Journal in April.
By helping its customers achieve their AI ambitions, Amazon -- and its investors -- stand to profit handsomely.
Nvidia
With Microsoft, Amazon, and other cloud computing providers locked in an AI arms race, Nvidia (NVDA +1.90%) finds itself in an enviable position. As the leading supplier of computer processors that power the cloud data centers and make AI's magic possible, the semiconductor star is enjoying soaring demand for its products.
NASDAQ: NVDA
Key Data Points
Nvidia's high-performance chips are being used to train the most advanced machine-learning models and run popular generative AI applications, such as ChatGPT. Nvidia is also increasingly supplying the software needed to operate a wide range of AI systems.
A diverse set of end markets -- including the automotive, financial, electronics, robotics, and advertising industries -- are rapidly adopting Nvidia's technology to accelerate their research and development programs and strengthen their computing capabilities. These are enormous markets, which combine to create a staggering $1 trillion growth opportunity for Nvidia.
This huge addressable market leaves plenty of room for Nvidia's continued expansion. After three decades of torrid growth, the chip juggernaut's current revenue base stands at roughly $27 billion.
