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Microsoft’s Potential Significant Shift May Concern AI Investors

Artificial Intelligence (AI) has emerged as a crucial player in this year’s stock market, contributing significantly to its resilience as interest rates increased and leading the Nasdaq Composite’s impressive 27% gain this year.

There are, however, emerging signs that the AI narrative may not be as secure. ChatGPT, an AI chatbot which initially stirred excitement for generative AI, saw its traffic decline substantially during summer break – suggesting a portion of users may have been students seeking help with homework assignments. Even as traffic returned with school’s return in September 2018, its seasonal nature raises serious concerns regarding the widespread adoption of AI among prominent tech CEOs who hold it up as being essential.

Now, there is more evidence suggesting the AI revolution may have been oversold.

Rumours abound online about Microsoft (NASDAQ: MSFT) cutting its orders for Nvidia H100 AI chips due to slow traffic growth on ChatGPT and reduced interest in Microsoft 365 Copilot.

As it’s essential to keep in mind, these reports should only be seen as speculation at this stage, and investors must exercise extreme caution when drawing any definitive conclusions from them. Even if these rumours prove accurate, the impact on Microsoft remains uncertain, and the traffic on ChatGPT appears to have declined, suggesting perhaps an overly enthusiastic reaction by businesses and consumers toward this technology despite CEO support for it.

At present, businesses are building the necessary infrastructure to support AI processes – including large language models – such as creating large virtual machine image datasets.



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