Artificial intelligence (AI) has given a significant boost to many tech stocks, including the big boys like Microsoft. However, it was unclear how this technology would impact these companies’ financials until today, when we got more hints. 🕵️
Microsoft says it plans to charge $30 per user per month for Microsoft 365 businesses to access its ai-powered Copilot service. That’s a steep price considering existing Microsoft 365 plans range from $12.50 to $36 monthly. 💵
This shows that Microsoft believes it has significant pricing power in this realm, even as it faces competition from Google Workspace and others like Zoom, Salesforce, etc. It also sets the bar for these other companies, who have yet to reveal pricing for their AI additions. How much more productive these tools make workers will ultimately determine whether companies are willing to pay this premium.
And that’s just the one way Microsoft plans to monetize AI. The company also announced making Meta’s new AI Model “Llama 2” available to its Azure customers, showing its commitment to diversifying its bets beyond OpenAI and ChatGPT. While Meta is not focused on monetizing Llama 2, users still need to pay for Microsoft’s commercial license to access the software. For Meta, getting its software to more users and developers will accelerate its adoption and development. 🤝
On another note, Teladoc Health announced an expanded partnership with Microsoft. The virtual healthcare company will use Microsoft’s AI services to automate clinical documentation on its platform, helping ease the burden on healthcare staff during virtual exams. 📝
The optimism about pricing power pushed $MSFT shares to fresh all-time highs, dragging the S&P 500 tech sector ETF $XLK higher with it. 🤩
In the meantime, the market is anxiously awaiting what other “business impacts” AI will have on other stocks that have also recently rallied. Time will tell whether the rubber meets the road, but optimism continues to reign supreme for now. 🤷