Doug O’Laughlin, president of SemiAnalysis, an independent research firm specializing in semiconductors and AI, said Microsoft Corp. (NASDAQ:MSFT) is falling behind in the artificial intelligence race despite its OpenAI partnership, as rivals ramp up infrastructure spending.
“Microsoft’s not in the race. Where are they? They’re getting owned,” O’Laughlin said in a recent conversation with John Coogan and Jordi Hays at TBPN.
When questioned by Coogan why Microsoft doesn’t announce and integrate new AI models on the same day they launch, O’Laughlin called it a “skill issue.”
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O’Laughlin said CEO Satya Nadella has positioned himself as “product manager of co-pilot” rather than CEO.
“You can argue it is now existential. He’s decided, like hey my CEO job is getting this one thing right, otherwise we’re s*****d,” O’Laughlin said.
He added that Microsoft has “the most to lose” among hyperscalers.
The discussion turned to Amazon.com Inc. (NASDAQ:AMZN), which announced $200 billion in AI capital expenditure plans.
O’Laughlin said Amazon Web Services is “the single biggest provider of power in the entire world,” citing data center tracking from SemiAnalysis.
“Every example that we track in the data center, they are on time and can scale to levels that are crazy,” O’Laughlin said.
AWS gigawatt projects are “ish on time” while every other gigawatt project is essentially delayed, according to O’Laughlin. He noted “a meaningful amount” of Amazon’s spending will go to NVIDIA Corp. (NASDAQ:NVDA) due to Trainium supply constraints.
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Despite competitive concerns, BNP Paribas analyst Stefan Slowinski projected that Microsoft maintains superior financial discipline with free cash flow margins at 22% versus 5% or lower for peers.
Comparing Microsoft and Amazon stock metrics:
Metric | Microsoft (MSFT) | Amazon (AMZN) |
|---|---|---|
Market Cap | $2.98 trillion | $2.25 trillion |
52-Week High | $555.45 | $258.60 |
52-Week Low | $344.79 | $161.43 |
Photo: Shutterstock
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