Microsoft (NASDAQ:MSFT) remains the dominant leader in the early stages of AI integration, Morgan Stanley (NYSE:MS) said Thursday, citing its latest industry survey.
Conducted through their proprietary AlphaWise survey, the study focused on the impacts of cloud optimization and AI's influence on long-term cloud adoption.
"AI is responsible for the biggest change in long-term cloud indications, with MSFT as the dominant leader in the early days,” Morgan Stanley analysts said in a note.
The survey, which included responses from 100 Chief Information Officers (CIOs) in the US and EU, revealed that 53% of respondents expect Microsoft to gain a larger share of AI/ML spending. This marks a noteworthy increase from previous surveys and points to robust market confidence in Microsoft's AI offerings.
“Given the increased AI component to cloud workloads and MSFT's over-indexing as the early AI beneficiary, this survey screens most positive for MSFT,” analysts continued.
Microsoft's advantage is further reflected in the projected growth of public cloud spending attributed to AI. Currently, 5% of public cloud spending is related to AI/ML, but this is expected to grow to 12% over the next three years.
The survey also highlighted that about 50% of AI spending is expected to come from new IT budgets, a positive indicator for overall IT budget expansion.
"The dollars for AI are coming from a combination of new and existing budgets, largely accruing to MSFT in the early days," the report notes.
Moreover, the study implies that other tech giants like Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) are also poised to benefit from AI integration, albeit to a lesser extent. Google Cloud Platform (GCP) is seen as gaining significant traction, with 18% of CIOs expecting GCP to gain the largest incremental share of AI/ML spend over the next three years.
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