Microsoft (MSFT) says that it is starting to use an artificial intelligence (AI) model from privately held Anthropic to answer queries posed to its Copilot digital assistant.
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The adoption and use of Anthropic’s AI model comes as Microsoft diversifies away from its reliance on OpenAI. Microsoft has invested more than $13 billion into OpenAI and has long been the artificial intelligence startup’s cloud computing partner.
However, media reports say that the relationship between Microsoft and OpenAI has become strained over the past year, leading Microsoft to turn to OpenAI rival Anthropic for some of its AI needs. The largest investor in Anthropic is technology giant Amazon (AMZN), which has put $8 billion into the AI company.
It’s Complicated
Microsoft isn’t alone in diversifying. OpenAI has been busy expanding its strategic partnerships in recent months. The company led by CEO Sam Altman has disclosed plans to spend $300 billion with Oracle (ORCL) and has inked a $10 billion agreement with chip designer Broadcom (AVGO).
In recent days, chipmaker Nvidia (NVDA) said it will invest up to $100 billion in OpenAI as part of a joint effort to spend hundreds of billions of dollars on new data centers. Analysts say that the Microsoft and OpenAI relationship is changing as each company grows its AI offerings. Last year, Microsoft said it would allow software engineers to get coding help from Anthropic and not just from OpenAI.
Microsoft has also publicly identified OpenAI as a competitor in the AI space.
Is MSFT Stock a Buy?
Microsoft’s stock has a consensus Strong Buy rating among 34 Wall Street analysts. That rating is based on 33 Buy and one Hold recommendations issued in the last three months. The average price target on MSFT stock of $626.88 implies 22.38% upside from current levels.
