The Rise of Big AI

Estimated reading time: 3 minutes

Microsoft Makes a Move

When ChatGPT first made headlines, it seemed like a new class of startups, such as OpenAI, Mistral, and Anthropic, could challenge Big Tech in the arena of AI supremacy. But Microsoft (MSFT) and the FAANG companies – as the big names of tech, including Apple and Google, are often referred to – have been re-asserting their power.

The big news: Microsoft recently hired Mustafa Suleyman from Inflection.ai, whose Pi chatbot surpassed 1 million daily users last month. He previously co-founded Google’s DeepMind AI lab and served as Inflection’s CEO. In other words, this seems like a big deal as far as Microsoft’s AI plans are concerned.

Investing in AI

Suleyman will run Microsoft’s Copilot, which harnesses the power of OpenAI’s ChatGPT. Microsoft invested heavily in OpenAI, as well as another AI startup, Mistral.

Meanwhile, Anthropic, whose highly praised Claude 3 chatbot lets users upload photos, charts, and other documents, is backed by Alphabet (GOOGL) and Amazon (AMZN). And reports from several reputable news organizations indicate that Apple (AAPL) is thinking about bringing Google’s Gemini AI model to the iPhone.

While artificial intelligence startups are hot, tech giants have their hands in every part of the AI pie.

Too Big to Flail

Training large language models (LLMs), such as ChatGPT, is incredibly resource intensive. Startups rely on big tech cloud infrastructure to host their AI models.

Big tech companies are also buying up the advanced graphics processing units (GPUs) needed to train their LLMs. Earlier this year, Mark Zuckerberg said Meta is spending billions of dollars on powerful Nvidia (NVDA) chips.

In the war for AI talent, established tech companies can offer huge salaries. Junior engineers in the field are often receiving seven-figure offers. They can also dangle another incentive: exclusive access to vast numbers of the most advanced GPUs on the market. The AI era is here. And Big Tech is well positioned to thrive in it.

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