What happened
With the white-hot popularity of artificial intelligence (AI) these days, nearly every company that is even vaguely associated with the technology is getting some attention.
This week it was cloud services provider Rackspace Technology's (RXT +49.39%) turn in the spotlight. Following the announcement that it was launching a business unit dedicated to AI, investors leaped on the stock. According to data compiled by S&P Global Market Intelligence, Rackspace's share price had climbed more than 37% higher week to date as of early morning Friday.
So what
On Tuesday Rackspace announced that it has launched the Foundry for Generative AI by Rackspace, or FAIR.
In the company's words, the unit is "a groundbreaking global practice dedicated to accelerating the secure, responsible and sustainable adoption of generative AI solutions across industries."
FAIR's offerings are provided under three umbrellas: ideation workshop, incubate, and industrialize. The first is a service in which organizations can determine use cases for generative AI in their business. Incubate, as the name implies, assists clients in establishing and integrating their initial AI functionalities. Lastly, the industrialize segment is described as "A systematic effort to transform the AI solution into a product."
NASDAQ: RXT
Key Data Points
Now what
Rackspace did not provide any details about FAIR's staffing, or its costs. It also did not provide any estimates for how it might affect its finances.
While the establishment of FAIR has really juiced interest in Rackspace stock, investors should bear in mind that per the company's description, it's basically a consultancy that will use AI solutions as a basis for its work. The more exciting AI plays are companies that are either developing such applications themselves, or have invested directly in the more high-profile AI businesses.
