American Giant Tech Companies Tap into Competition in the Era of AI
Published in Nikkei
(Japan) on 4 February 2024
by (link to original)
American giant tech companies have announced earnings for the Oct-Dec 2023 quarter. While many companies secured double-digit revenue growth, Microsoft, which quickly ventured into artificial intelligence-related businesses, stood out with its strong performance. On the other hand, Apple, struggling to grow its smartphone sales, stagnated.
This change highlights a significant shift in the tech industry, with the main battlefield for these influential giant tech companies moving from smartphones to AI.
Microsoft's revenue increased by 18% compared to the same period last year, marking the highest quarterly revenue of all time. They led their rivals in monetizing generative AI services, which automatically create text and images.
Apple's revenue growth was limited to 2%, making it the only giant tech company to miss double-digit growth. The iPhone, which has been on the market for 16 years, has hit a plateau.
In the stock market, Microsoft's share price has been rising due to expectations for AI market expansion. Its current market capitalization exceeds $3 trillion, surpassing Apple, which was previously the world's largest. Nvidia, holding a high share in AI-targeted semiconductors, continues to perform well, with a market capitalization exceeding $1.6 trillion.
Japanese companies must realize that engaging in AI can boost both performance and stock prices. They need to leverage AI in their businesses as an opportunity to catch up with the global digital transformation, an area where Japan has been lagging.
Especially in Japan, with its declining birthrate and aging population, improving productivity is an urgent task. By effectively utilizing AI, it is possible to address social issues and create new markets. Japan could take initiatives such as enhancing logistics efficiency through autonomous driving and promoting labor savings through robotics.
It has been just over a year since the spread of generative AI, and the market is poised for significant expansion. Just as smartphones became a foundational business platform enabling the creation of powerful apps, we can expect an increase in apps and services that utilize AI. This opens up more opportunities for startups worldwide, including in Japan.
However, the dominance of giant tech companies like Microsoft, Amazon and Google in the cloud computing market, which processes AI data, is concerning.
As the market grows, these companies' profit-making structures from cloud services are becoming more entrenched. Regulatory authorities in various countries need to closely monitor the situation to ensure healthy market competition in the era of AI.
This change highlights a significant shift in the tech industry, with the main battlefield for these influential giant tech companies moving from smartphones to AI.
Microsoft's revenue increased by 18% compared to the same period last year, marking the highest quarterly revenue of all time. They led their rivals in monetizing generative AI services, which automatically create text and images.
Apple's revenue growth was limited to 2%, making it the only giant tech company to miss double-digit growth. The iPhone, which has been on the market for 16 years, has hit a plateau.
In the stock market, Microsoft's share price has been rising due to expectations for AI market expansion. Its current market capitalization exceeds $3 trillion, surpassing Apple, which was previously the world's largest. Nvidia, holding a high share in AI-targeted semiconductors, continues to perform well, with a market capitalization exceeding $1.6 trillion.
Japanese companies must realize that engaging in AI can boost both performance and stock prices. They need to leverage AI in their businesses as an opportunity to catch up with the global digital transformation, an area where Japan has been lagging.
Especially in Japan, with its declining birthrate and aging population, improving productivity is an urgent task. By effectively utilizing AI, it is possible to address social issues and create new markets. Japan could take initiatives such as enhancing logistics efficiency through autonomous driving and promoting labor savings through robotics.
It has been just over a year since the spread of generative AI, and the market is poised for significant expansion. Just as smartphones became a foundational business platform enabling the creation of powerful apps, we can expect an increase in apps and services that utilize AI. This opens up more opportunities for startups worldwide, including in Japan.
However, the dominance of giant tech companies like Microsoft, Amazon and Google in the cloud computing market, which processes AI data, is concerning.
As the market grows, these companies' profit-making structures from cloud services are becoming more entrenched. Regulatory authorities in various countries need to closely monitor the situation to ensure healthy market competition in the era of AI.
Previous article![]( "On Politics and Entertainment")
Next article![]( "To Use Joe Biden’s Age as an Insult Is Simply Ageism in Disguise")