Microsoft Shares Rally To An All-Time-High As Software Giant Adds The AI Subscription

On Tuesday, Microsoft Corporation (NASDAQ: MSFT) shares closed at a record after the company announced pricing for its new AI subscription service, Microsoft Copilot. This subscription service adds AI to its Office offerings at a price of $30 per month, potentially increasing monthly prices for enterprise customers as much as 83% and creating an additional source of revenue through recurring subscriptions.

A New All-Time-High

The stock jumped 4%, closing at $359.49, and breaking the previous record of  $348.10 from June 15th, rising about 50% for the year.

Microsoft’s AI Offering

It’s no secret that Microsoft has been heavily investing in generative AI, largely through a multibillion-dollar investment in the creator of ChatGPT, OpenAI, as well as into Advanced Micro Devices (NASDAQ: AMD) AI chips to power its AI development. What Microsoft aims to do is help create a true match to Nvidia Corporation (NASDAQ: NVDA) who dominates the chip market with its 80 to 90% share and by doing so, reduce the cost of AI hardware.

Its AI service, Microsoft Copilot, that was previously announced in March is able to design presentations and write prompts, replacing an assistant in summarizing business meetings and helping those with poor organizational skills prioritize their inbox. It’s undergoing testing by as many as 600 customers, including General Motors (NYSE: GM).

Unlike Microsoft, Amazon Is Developing Its Own Chips

Amazon.com (NASDAQ: AMZN) might have entered with e-commerce declines and pullback in cloud customer spending due to a weakened economy, but it once again showed the resilience of its diverse business model, heavily investing into its growth on the AI front. During the first half of the year, it was pivoting different parts of its business to AI as it aimed to get ahead of Microsoft and Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) offerings. Interestingly, Amazon aims to distinguish itself in the AI field by going into the hardware side of AI by developing AI-specific chips. With its in-house chips, Amazon promises to offer the best price to performance ratio in the industry.

Nvidia Is Running The AI Chip Show, But Its Peers Are Determined To Power The AI Revolution

Although Nvidia has emerged as the leader whose chips powered the early days of the AI revolution, both big and small rivals are rising to the challenge with Advance Micro Devices and Intel Corporation (NASDAQ: INTC) are determined to catch up, with Microsoft and Amazon potentially changing the rules of the game entirely. Export restrictions and an intensifying technology war between China and the U.S. can also play a big part in reshaping the AI chip landscape.

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.