Microsoft ‘clear winner’ in ongoing generative AI fight, says Macquarie

Macquarie analyst Sarah Hindlian-Bowler notes that OpenAI announced GPT-4, the newest release of its GPT AI model and "a vast improvement over prior model versions" and that Microsoft (MSFT) also announced on Tuesday that its new Bing search has been running on an early version of GPT-4 for the past five weeks. While the firm said generative AI is "in a hype cycle," it is "nevertheless quite real" and GPT-4 is "the current industry standard to beat." Investors struggle to understand who will win and who will lose, but Macquarie thinks Microsoft is a "clear winner" given its improvements to Bing, the size of the search market and Google’s (GOOGL) current dominance. The firm maintains a Neutral rating and $241 price target on Microsoft shares.