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Investors were treated to two different versions of artificial intelligence this week. And both sound pretty good.
Microsoft (MSFT) announced a partnership with Coca-Cola (KO) in which the soft drink king would pay $1.1 billion to “jointly experiment” with Microsoft’s new Azure AI-based version of its cloud-based suite of productivity software.
And when Microsoft’s quarterly results showed AI driving more and more of its cloud business growth and bullish guidance from an enthusiastic leadership team, the stock rose 2% Friday.
Alphabet (GOOG, GOOGL) had a similar story, but with a stronger investor reaction — up 10% Friday — as investors reconsidered the company’s second-place position to Microsoft. Now, it seems YouTube, search, and cloud businesses are strapped in and ready for their AI-ification.
On the other side of the table was Tesla’s (TSLA) earnings presentation. The company doubled down on its endgame of fully autonomous vehicles, a robotaxi fleet, licensing self-driving tech to other automakers — they’re in conversations, Elon Musk said — and the potential of harnessing the AI computing power of parked Teslas to create something akin to Amazon’s AWS, a bold but old idea that has been floating around since the 1980s.
These are two very different visions of an AI future. “Productivity software” certainly doesn’t have the same ring as “robotaxi,” which is on the fun end of Peter Thiel’s “we wanted flying cars, instead we got 140 characters” spectrum we discussed two weeks ago.
But as our Chart of the Week shows, investors liked both of them.
And they should. Tesla’s surge was partially about rebutting some reasonable investor fears — cutting costs to tackle lagging demand and reaffirming that cheaper EVs are on the way. But the bigger story was the self-driving AI vision from the grand visionary.
This is rare, and it’s why some people love Elon. For the most part, the path of AI first runs through the tedious corporate world of programmatic advertising and productivity tools, the core businesses of today’s big AI software/cloud players — Google, Microsoft, and Meta.
On the other hand, Tesla’s splashy self-driving future of consumer cars and robotaxis is far more aligned with the “change the world” Big Tech expectation (aspiration, really) than the “better Office 365” reality we so often see.
But these more mundane improvements are everything. It’s important to remember the lessons that any regional American city will teach you: Tons of America’s rich simply took the practical route, embracing the less glamorous business of fast-food franchising, agricultural processing, waste management, car dealerships, commercial properties, not to mention all the other B2B things you’d never think twice about. For every Zuckerberg, there are thousands of Buddy Garritys.
Zuckerberg, however, may have taken the mundane too far Wednesday in Meta’s earnings call by, as our Hamza Shaban put it, making AI aspirations “seem small.” The company talked about “scaling business messaging,” “better ad insertion,” and selling AI computing power.
And as we wrote in March, breaking productivity barriers is huge for the economy. But you still have to sell them. After all, they’re still “productivity gains,” not flying cars.
Ethan Wolff-Mann is a Senior Editor at Yahoo Finance, running newsletters. Follow him on Twitter @ewolffmann.
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