Yesterday we talked about Apple (AAPL), a giant that keeps investing in innovation to remain a giant.

Today, we’ll talk about another one of these companies, trying to dominate a market that is newly being formed.

Microsoft (MSFT) has been making significant investments in artificial intelligence (AI) infrastructure and talent in both the United States and Europe, reinforcing its position as the top player in the AI market.

A big part of Microsoft’s AI investment is working with OpenAI. The company moved into the third phase of this partnership with a huge investment that spans several years and billions of dollars.

The partnership started with Microsoft investing $1 billion in 2019 to help OpenAI work on creating advanced AI that could do a wide range of tasks as well as or better than humans.

This project aims to develop new tech for super-fast computing on Microsoft’s cloud service, Azure, making it the only cloud service OpenAI uses. They want Azure to be able to handle big AI projects.

They’re focusing on making AI that can tackle big world problems like climate change, healthcare, and education by finding connections no human could. Both companies want the benefits of this advanced AI to be shared widely, helping everyone have the freedom to do what they love.

Microsoft also invested $2.1 billion in Spain to improve its AI and cloud services, helping the country to grow digitally. In the UK, Microsoft is investing $3.2 billion in AI development and training, its biggest investment in the country.

These investments are going to make sure Microsoft is on top not just in the U.S. but also all around the world.

As the largest company in the world, there is no better company to dominate the artificial intelligence market.

Furthermore, Microsoft has already introduced Copilot for enterprises, and the beta version is available for individuals.

Microsoft’s new tool, Copilot, is designed to make work easier and more creative by using AI. It works with Microsoft’s products, offering AI help to streamline tasks, boost efficiency, and encourage creativity.

By adding Copilot to platforms like Windows and OneDrive, Microsoft is making its ecosystem smarter and strengthening its market position.

With these investments in AI and tools like Copilot, Microsoft aims to both change the AI scene significantly and be at the top of it.

If successful, these initiatives could lead to an increase in the company’s Uniform Return on Assets (ROA) by driving growth, enhancing productivity, and opening new avenues for innovation and market dominance.

Best regards,

Joel Litman & Rob Spivey

Chief Investment Strategist &
Director of Research
at Valens Research

This analysis of Microsoft (MSFT)’s credit outlook is the same type of analysis that powers our macro research detailed in the member-exclusive FA Alpha Pulse.