Tech giants
October 27, 2023

Even in the age of AI, it has come down to Darwin’s theory; ‘The survival of the fittest’, only this time, it is the survival of the techiest. A frequently asked question in the technological landscape and even outside of it is, can tech companies, especially ones vying to secure the top spot, survive without AI? The answer is a plain, hard no. Not only tech companies, but every company that has a global outreach and is looking to thrive in the digital era need to incorporate AI, at least in one of their categories. While this may seem like a hyperbolic statement, the reality is as such that AI has become the defining factor, irrespective of which sphere you are a part of. Therefore, during an epoch where AI is revolutionising the tech industry, it is only natural that key players such as Microsoft and Apple are constantly featured in the news. Interestingly however, although the two companies are making headlines back to back in the world of AI, they are in the spotlight for entirely different reasons.

Microsoft and the tricks up its sleeve

This one needs no introduction. If it is Microsoft, it is AI and vice versa. They have now become collocations of each other, almost an inseparable couple. One thing about Microsoft is that they will take risks, but never without calculating. While this may sound like an oxymoron and a futile attempt, Microsoft’s giant leap of faith concerning OpenAI did not materialise overnight. They didn’t hang onto OpenAI in the hope of riding the bandwagon, but because they saw a way in which they could monetise it. Starting off with a $ 1 billion investment in 2019, followed by another multi-billion dollar deal in 2023, Microsoft now claims ownership of 49% of OpenAI.  

A strategic collaboration as such gives them the leeway to harness the power of OpenAI’s models and inculcate them into various products and services, such as GitHub Copilot and ChatGPT. More than 1 million subscribers are already using Copilot, which offers AI-driven enterprise tools within Microsoft 365. 37,000 organisations have incorporated Copilot for Business into their operations, piquing the interest of more than 40% of Fortune 100 companies. Even though in the initial stages Copilot had a wobbly reception, in the direction that things are headed right now, it is safe for Microsoft to dream big of positioning itself as the leader in AI-driven business process transformation. Especially because they are even wielding AI’s powers within established CRM systems such as Salesforce. 

While most of their predictions about when their investments in AI will pick traction showed 2024 as their lucky year, Microsoft’s early success rates came as a surprise even for them. However, no one is complaining. Since every hit is a home run,  Microsoft will not back down from their decision to invest in OpenAI because it has already experienced a 13% boost in revenue. A clear indication that they have hit the jackpot. 

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As mentioned in VentureBeat, Microsoft CEO Satya Nadella hinted at the growing interest among enterprise customers in AI adoption. A reflection of this expanding demand can be seen through Microsoft 365 and their productivity suite infused with AI capabilities which experienced an 18% rise in Office 365 commercial revenue. A swell that was manoeuvred by a 10% increase in user seats and higher revenue per user. In addition to generative AI and its superpowers, in terms of increasing enterprise cloud consumption, Microsoft is also banking on data migration and additional enterprise workloads. 

Is Apple struggling?

Life is proving to be extremely difficult for tech companies that were a lap behind the other companies in merging their lifestyle with that of AI. Apple is one of them. While they did see the AI wave coming, they were not geared up to fall in line with the avalanche of changes that came with it. One minute you knew the technological landscape like the back of your hand, the next minute you were an alien in your own trade. Since Apple found itself unprepared for the rapid growth of the AI trend, they have been working overtime to catch up with the rest of its contenders. They are in the process of creating their own large-language model (LLM) named Ajax and have initiated the development of an early-stage chatbot. 

However, Apple’s attention to AI is fractionated. This is mainly because it is focusing on the metaverse, especially the Apple Vision Pro headset. With global smartphone sales on the decline, Apple is facing increased pressure to introduce innovative AI technologies that can stimulate growth in some way. But trying to keep their head in the game is costing Apple a fortune where the company is set to invest $1 billion per annum to effectively integrate generative AI capabilities into their entire spectrum of products. A move that was made so that they could at least attempt to be in the same AI league as Microsoft and Google.

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In addition to Ajax, Apple has also developed an internal chatbot titled AppleGPT to test the LLM. Apple’s AI and software engineering team is on a mission to update Siri, Messages, and Apple Music by partnering up with generative AI. And in pursuit of this mission, they have developed AppleGPT. The team is also striving to introduce AI into iOS for improved auto-suggestion and intelligent response capabilities. Even though Apple is struggling to keep up, endeavours as such will empower them to establish a more significant presence in the AI field, particularly as they have previously been excluded from major AI forums and government initiatives. These exclusions included the Senate’s bipartisan AI Insight Forum and a White House meeting connected to the Biden administration’s responsible generative AI development initiatives. It is evident then that, if Apple is to climb their way out of the AI slump, it will have to pursue AI-integrated initiatives, aggressively.

Apple and Microsoft are sharing the limelight these days because their success and failure are spoken about quite frequently. This does not imply that other companies have slackened off, but rather everyone is working vigorously to not fall back in the world of AI. Because the minute that one stops for a breather, the rest of the competitors will be miles ahead. 

(Sandunlekha Ekanayake)

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