How Microsoft is forecasted to dominate the AI integration battle between tech giants

Yahoo Finance tech editor Dan Howley joins the Live show to discuss how Microsoft is currently leading the AI conversation among the tech giants.

Video transcript

SEANA SMITH: When it comes to generative AI, it seems Microsoft is dominating the competition among big tech giants. Yahoo Finance tech editor Dan Howley here to weigh in. And Dan, I know you've been speaking with a lot of analysts on this. How big of a lead does Microsoft have?

DAN HOWLEY: They have a pretty decent lead right now. And it's mostly because of their investment in OpenAI. I think that's really where you're seeing Microsoft pull ahead. If it wasn't for that, we'd still be talking about Google as really the AI leader. But now that they have OpenAI-- they're not beholden to Microsoft by any stretch of the imagination. But Microsoft did make that multibillion-dollar investment over several years.

So they really do have that kind of as the propellant for their rocket. And really, they're riding that. I'm going to try to keep this metaphor going, I don't know how much longer, into the--

DAVE BRIGGS: I love metaphors. Keep going.

DAN HOWLEY: But it's interesting because they weren't in this position too long ago, right? When you thought about AI, you didn't think about Microsoft. Everybody has AI, by the way. Every tech company uses AI to one degree or another. This generative AI, though, is really what we're all talking about right now.

And so that's where Google helped basically establish this technology. And now they're an also-ran. So it's interesting to see how the cards have kind of changed, right, just as quickly as a month. And you look at what Microsoft has to offer right now as far as their generative AI capabilities, they have Microsoft Security Copilot, Microsoft 365 Copilot, Microsoft Dynamics 365 Copilot.

They have Bing. They have Teams. They have Edge. So they're throwing this-- Skype-- into everything they have. And I think that's really why we're seeing Microsoft just kind of keep running with this, while we're still waiting for Google to figure out what they're doing.

DAVE BRIGGS: So they're really the Tesla, if you compare it to the EV space. So who's closest to Microsoft's bumper?

DAN HOWLEY: Right now, Google still, yeah. I mean, they're--

DAVE BRIGGS: We wanted more metaphors, man.

DAN HOWLEY: They're on a collision course. What else?

DAVE BRIGGS: We need a bell.

SEANA SMITH: Yeah, we do.

DAVE BRIGGS: Keep going.

DAN HOWLEY: Microsoft is still burning rubber though, I would say, as far as this goes. They have the better charge. I'm going to stop.

But yeah, I do think that it's mostly Google at this point. Meta is working on it. They said specifically-- Mark Zuckerberg had said, look, we're building a team for generative AI. Amazon is in it.

One of the things one of the analysts that I spoke to said that's interesting though, is, look, Microsoft has this big lead right now. They've also driven a lot of interest. And that, in turn, means that smaller companies are getting in there. And they're going to perhaps be the next disruptors that really start to throw a wrench into the works for Microsoft.

So it might not necessarily be Google. It might be another startup that comes along and says, hey, we have this awesome idea for generative AI. We have this wild scheme that's going to drive people nuts.

And I think the next thing that you should look for is what they call multimodal, where you'll be able to use a text box to generate video, image, and text all in one. And that's where we're going to see it next.

SEANA SMITH: That was all very impressive. The metaphors just kept going and going.

DAVE BRIGGS: It's your turn, man.

SEANA SMITH: Wrapping up in the middle--

DAN HOWLEY: There you go.

SEANA SMITH: I don't know. Yeah, but--

DAVE BRIGGS: She's going to hit the brakes on the segment.

SEANA SMITH: Yeah, we will hit the brakes on this segment. We've got to go. Howley, awesome, thanks so much.