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No one knows which public companies will succeed in bringing commercial AI products to market, but an analyst at MKM Partners thinks he's found some short-term winners: public cloud players like Amazon Web Services:
Analyst Rohit Kulkarni wrote in a research note on Tuesday that he has done extensive research on AI over the past month. In recent weeks, he says, he's also watched Tesla 's AI daily demo videos (TSLA) and tried out the Make-A-Video (META) metaplatform and Google Phenaki . The last two projects can create videos from text.
"We're pretty sure we're on the verge of accelerating Big Tech AI Wars, but it's unclear who is leading the way in terms of commercial success," Kulkarni wrote. Furthermore, we are absolutely sure of it.
Something. Commercial deployment of AI applications requires significant storage and computing resources, so public cloud providers may benefit from deployment bottlenecks for years to come.”
Amazon Web Services, Microsoft Azure (MSFT) and Google Cloud Platform are among the top cloud service providers.
Kulkarni has a Buy rating on Google Parent Alphabet ( GOOGL ), Amazon.com ( AMZN ), and Meta with price targets of $140, $170, and $240, respectively. He believes that in the last 18 months, AI innovations have shifted to contextual searches, chatbots and AI-generated content autofill technologies.
"Overall, we believe the advent of personalized AI content is a huge step forward for the Internet, perhaps even bigger than AI-driven content recommendations," he wrote. "Unlike TikTok, which extracts the best content for you, AI apps can now generate the best content for you with minimal overhead."
Please note that these applications have high computing and storage requirements. For example, he believes that Meta's investment in its AI ambitions will likely add $3 billion to $5 billion in capital costs by 2022.
Email Conor Smith at connor.smith@barrons.com
