The Magnificent 7 are described as major megacap companies whose combined market value exceeds $20 trillion. The group is up about 5% for the year, while the S&P 500 is up about 9%. Microsoft is singled out as the most “unbundled,” down 13%, because it fell behind after leading early in the AI revolution. In 2023, Microsoft invested $10 billion in OpenAI and previously invested $3 billion in earlier rounds, planning to integrate OpenAI technology into Azure and restricting OpenAI from other cloud deals. The partnership later unraveled as OpenAI formed major partnerships with Microsoft rivals. The new arrangement grants Microsoft a non-exclusive license to OpenAI IP through 2032, signaling trouble for Microsoft’s AI future. Meanwhile, Nvidia became a dominant AI chip provider, Amazon expanded AI through AWS, and Google integrated Gemini.
"The Magnificent 7 are supposed to comprise the world's hottest megacap companies. Their businesses will control the future. They are a mix of AI, search, the future of vehicles and robots, Alphabet (parent company of Google), Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Meta Platforms (parent company of Facebook and Instagram), Microsoft, Nvidia ( NASDAQ: NVDA | NVDA Price Prediction), and Tesla ( NASDAQ: TSLA) hold the keys to everything from jobs to electricity. Their market caps, as a whole, exceed $20 trillion. That is about the same as China's GDP."
"As a group, they are up 5% this year. The S&P 500, on the other hand, is up 9%. Among other things, their futures have become unbundled. None is more unbundled than Microsoft ( NASDAQ: MSFT), which is down 13% this year. The primary reason is that, in the early stages of the AI revolution, it was a leader. Now, it has fallen well behind."
"That year, it put $10 billion into OpenAI, the market leader. It has already invested $3 billion in two earlier investment rounds. Microsoft planned to integrate OpenAI's technology into Azure cloud computing products, and Microsoft also set a deal that blocked OpenAI from other cloud deals. The partnership unraveled as OpenAI created major partnerships with Microsoft rivals."
"In the formal announcement of the new arrangement, the most important section was "Microsoft will continue to have a license to OpenAI IP for models and products through 2032. Microsoft's license will now be non-exclusive." Microsoft's AI future is in deep trouble."
Read at 24/7 Wall St.
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