# Tech CEOs wax poetic on AI, big adds to sales will take time
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-04-26
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Tech CEOs Optimistic About AI for Sales Growth, But
Meta Description: Follow tech giants Microsoft and Google as they invest in AI, promising generative products. Results show slow sales growth. Stay updated.
URL: https://financedigest.com/tech-ceos-wax-poetic-on-ai-big-adds-to-sales-will-take-timehtml

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# Tech CEOs wax poetic on AI, big adds to sales will take time

By Noel Randewich and Akash Sriram

(Reuters) -Microsoft Corp and Google-parent Alphabet Inc talked up investments in artificial intelligence (AI) for the second quarter in a row but their results on Tuesday suggested that any substantial additions to sales will be slow.

The tech behemoths have launched an array of products that they promise are packed with generative AI, which creates brand new content – text, image, code – from past data. The term became a buzzword after Microsoft-backed firm OpenAI released ChatGPT, a chatbot that writes human-like responses.

The world’s most advanced AI models are coming together with the world’s most universal user interface – natural language – to create a new era of computing,” Satya Nadella, Microsoft’s [chief executive officer](https://www.financedigest.com/impact-com-names-hubspot-veteran-kim-walsh-as-chief-growth-officer.html "impact.com Names HubSpot Veteran Kim Walsh as Chief Growth Officer"), said in a statement on Tuesday.

With quarterly reporting season just under way, the [term “AI” has been used nearly](https://www.financedigest.com/german-economic-growth-to-remain-muted-in-near-term-imf.html "German economic growth to remain muted in near term – IMF") twice as frequently in the conference calls of S&P 500 companies as it was in the previous quarter, a Reuters analysis showed.

Google used the term 52 [times on its first-quarter call](https://www.financedigest.com/final-call-for-first-time-buyers-seeking-a-new-home-at-sovereign-place.html "Final Call For First Time Buyers Seeking A New Home At Sovereign Place") on Tuesday, up from 45 in the fourth quarter. Microsoft said it 36 times, versus 20 – not including references to its partner OpenAI.

Both [companies said AI was already juicing sales](https://www.financedigest.com/aragon-the-decentralized-management-platform-for-companies-announces-token-sale.html "ARAGON, THE DECENTRALIZED MANAGEMENT PLATFORM FOR COMPANIES, ANNOUNCES TOKEN SALE "), but neither said when or if they would start breaking out any sales, costs, or profits from the technology.

Lots more to come,” Alphabet boss Sundar Pichai said on Tuesday, after he mentioned some of the products the company launched last month, including Bard, [Google’s answer to ChatGPT-powered Microsoft search](https://www.financedigest.com/a-year-in-property-google-searches-reveal-what-buyers-were-looking-for-this-year.html "A year in property: Google searches reveal what buyers were looking for this year") chatbot Bing.

Google, which has also unveiled a flurry of AI tools for its email, collaboration and cloud software, reported quarterly profit and revenue above estimates and said it would [buy back $70 billion](https://www.financedigest.com/exclusive-amazon-to-secure-unconditional-eu-approval-for-8-5-billion-mgm-buy-sources.html "Exclusive-Amazon to secure unconditional EU approval for .5 billion MGM buy – sources") in stock.

It said last week it would [combine its AI research](https://www.financedigest.com/savings-efficiencies-and-greater-reliability-in-entity-verification-processes-of-a-combined-annual-value-of-650m-to-the-financial-services-industry-identified-in-new-research-into-legal-entity-ident.html "Savings, Efficiencies And Greater Reliability In Entity Verification Processes Of A Combined Annual Value Of 0m To The Financial Services Industry Identified In New Research Into Legal Entity Identifiers") units Google Brain and DeepMind and work on “multimodal” AI, like OpenAI’s latest model GPT-4, which can respond not only to text prompts but to image inputs as well to generate new content.

I [mean the announcements](https://www.financedigest.com/end-of-life-announced-for-sage-200-2010-but-what-does-this-means-for-businesses.html "END OF LIFE ANNOUNCED FOR SAGE 200 2010 – BUT WHAT DOES THIS MEANS FOR BUSINESSES?") are there and things will move quickly. But I think it’s going to take some time to see real meaty results,” said Thomas Martin, a senior portfolio [manager at Globalt Investments](https://www.financedigest.com/invest-in-data-management-now-and-reap-the-rewards-sooner-than-later.html "Invest in data management now and reap the rewards sooner than later").

“As far as working it into actual numbers … think about how long it took for Google to break out YouTube just as an example,” he said, adding that anything significant was unlikely to show up on statements for more than a year.

Brett Iversen, Microsoft’s head of investor relations, told Reuters, however, that “it’s really early” and that AI was still a relatively [small part of Microsoft’s total business](https://www.financedigest.com/another-lockdown-is-the-top-concern-of-nearly-half-of-uks-small-businesses.html "Another Lockdown is the Top Concern of nearly Half of UK’s Small Businesses").

BIG PLAYERS

Nadella said in the three [months since](https://www.financedigest.com/dollar-on-track-for-best-month-since-2015.html "Dollar on track for best month since 2015") Microsoft made a new AI “Copilot” developer tool broadly available, over 10,000 organizations had signed up, including Coca-Cola and General Motors. The tool is for its [product suite that includes Word documents](https://www.financedigest.com/document-admin-drains-productivity-businesses-especially-financial-services.html "Document admin drains productivity in all businesses, especially those in financial services."), Excel spreadsheets, and Outlook emails.

Microsoft [beat estimates for quarterly revenue and profit](https://www.financedigest.com/elevator-maker-kone-hikes-outlook-as-q1-profit-orders-beat-forecasts-2.html "Elevator maker Kone hikes outlook as Q1 profit, orders beat forecasts") on Tuesday, driven by growth in its cloud computing and Office productivity software businesses.

Bing has lagged [Google search](https://www.financedigest.com/google-takes-wraps-off-its-answer-to-microsofts-ai-search-challenge.html "Google takes wraps off its answer to Microsoft’s AI search challenge") for decades but Nadella said that Bing downloads had jumped since the addition of AI features and now had 100 million daily users.

Ultimately, it may be a much larger of an impact to Microsoft’s enterprise software and perhaps less so in search,” said Haruki Toyama, [portfolio manager at Madison Investments](https://www.financedigest.com/heineken-to-invest-300-million-in-brazil-to-expand-premium-beer-portfolio.html "Heineken to invest 0 million in Brazil to expand premium beer portfolio").

Toyama said Google already used AI to monetize their search algorithms and he did not expect AI advances from its rivals to be as much of a threat as some thought.

Meta Platforms Inc, which [reports results on Wednesday, and Amazon.com Inc, which reports next](https://www.financedigest.com/whats-next-for-esg-reporting.html "What’s Next For ESG Reporting?") week, have also jumped onto the AI bandwagon.

Meta, which has admitted it is playing catch-up in AI, has published an AI model that can pick out individual objects from within an image. Amazon’s cloud division AWS, the world’s largest, has [released a suite of technologies](https://www.financedigest.com/lumen-releases-report-from-pwc-on-the-roi-of-attention-technology.html "Lumen Releases Report from PwC on the ROI of Attention Technology") aimed at helping other companies develop their own chatbots backed by AI.

Shares in Meta and Amazon rose 2.3% and [5.3% on Tuesday after market](https://www.financedigest.com/marine-cables-and-connectors-market-is-projected-to-expand-at-a-cagr-of-5-3-from-2017-to-2025.html "Marine Cables and Connectors Market is Projected to Expand at a CAGR of 5.3% from 2017 to 2025"), respectively.

(Reporting by Noel Randewich in [San Francisco](https://www.financedigest.com/paul-jasper-joins-rimon-laws-san-francisco-office-as-partner.html "Paul Jasper joins Rimon Law’s San Francisco Office as Partner") and Akash Sriram in Bengaluru; Additional reporting by Jane Lee, Peter Henderson, Yuvraj Malik and Greg Bensinger; Writing by Sayantani Ghosh; Editing by Stephen Coates)


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