If you made a list of the most discussed topics over the past couple of years, artificial intelligence (AI) would surely be near the top. Since the popularity of AI tools like ChatGPT has brought more attention to the technology, many tech companies have seen their valuations skyrocket.
It's been a fun ride so far for plenty of investors, but the elephant in the room is growing. A lot of investors are wondering the same thing: Is AI a bubble? Only time will tell, but I think the technology will sustain, while many of the pure-play AI companies will not.
For those looking for AI exposure with minimal risk, Microsoft (MSFT 0.73%) is a great option.
Image source: Microsoft.
Microsoft's role in the AI ecosystem
Microsoft's main role in the AI ecosystem deals with its cloud computing platform, Azure. It's the second-largest cloud platform in the world behind Amazon Web Services (AWS), so it's home to many of the companies developing or relying on AI.
Training, developing, and scaling AI models as they are today would be impossible without major cloud platforms like Azure and AWS. They provide the computing power, storage, and networking tools needed to make it happen.
That dependence is largely why Azure revenue has been growing impressively. In the first quarter of Microsoft's fiscal year 2026 (ended Sept. 30, 2025), Azure and other cloud services revenue increased 40% year over year.
NASDAQ: MSFT
Key Data Points
A lot to gain; little to lose
Countless companies globally rely on Microsoft's software to run their daily operations; it is its bread and butter. And it's doubtful the company will lose its grip on the industry, especially as it continues to strengthen the appeal of its tools by adding -- and selling -- AI capabilities.
While some companies' fates rest on AI growth and becoming the next big thing, Microsoft's business only stands to gain from AI developments. There's a lot of upside if it goes well, but if it doesn't, Microsoft's business will remain strong. The company is involved in almost every tech industry you can imagine.
It'll still be the go-to for enterprise software; it'll still power many businesses with Windows; it'll still have Xbox; it'll still have hardware; and it'll still have LinkedIn. It's as diversified a tech company as you'll find.
The biggest issue facing Microsoft is whether its massive spending translates into tangible profits. There's a risk it overspends, but when you have the money Microsoft does, it's worth it to ensure you're not left behind in the AI arms race. There are much worse things on which a business can overspend.
