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Bank: Who will win in AI tech?

March 9, 2023

Investment bank Jefferies has used its University team to undertake a deep dive into AI and explore the possible winners in the technology sector. Jefferies says that the excitement around AI is justified, and it believes that AI tech has the potential to disrupt large parts of the white-collar workforce in time. However, Jefferies stated that the underlying tech behind ChatGPT is not necessarily new.

Jefferies expert is Douwe Kiela, who has over 15 years of experience in the tech sector with experience in AI, machine learning, and language processing.

Jefferies says that Microsoft and Alphabet’s Google are best positioned in AI, noting: “Our expert believes that MSFT will be a key beneficiary in the AI space, highlighting that their cloud business (Azure) will benefit as AI deployments need a place to be trained and hosted. Our expert also noted that Google has been known as the ‘AI cloud’ and is likely well positioned with its own Large Language Models (LLMs) and chat UI. He believes Amazon is behind in AI, but says partnerships like the one with Hugging Face will help them reposition.”

Jefferies also believes that the AI integration into the Bing search engine is a “bit gimmicky”, commenting: “Our expert stated that the integration of ChatGPT technology into Bing feels like a gimmick. While he believes the tool is fun to play with, he thinks it needs enhancements before consumers will use it in their daily life.”

The report adds that Microsoft has stolen the AI narrative, but cautions “don’t count Google out: Our expert believes that through their investment in OpenAI, Microsoft has been able to steal the narrative that they are the leaders in AI, doing so without actually doing the heavy work on LLMs. However, he expects Google will fight back against the narrative through their own consumer-facing AI releases.”

Jefferies also warns that ChatGPT is not yet ready for the enterprise: “Our expert believes that AI hallucinations and incorrect responses make the technology unfit for the enterprise in its current form. However, over time he expects Microsoft will offer the technology to the enterprise through integrations in Office 365 that help to create first drafts for end users to iterate on.”

“The virality of ChatGPT will benefit future iterations of the product: ChatGPT is benefiting from usage data as consumers interact with the tool. The usage data that OpenAI generates will help them to build the next generation of ChatGPT,” says the Jefferies report. “Don’t call it a comeback – Meta is in the game: Our expert believes that Meta is a serious competitor in the AI wars, noting that they are actively investing in AI. He believes Meta’s mistake was positioning itself as a metaverse company rather than an AI company.”

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