Generative artificial intelligence (AI) is a hot ticket these days, and some of the largest technological companies in the world build their future around AI strategies. At the same time, the changing AI can present serious commercial risks. Tech Titan Microsoft(Nasdaq: MSFT) is not afraid to share his analysis of the risks linked to the AI with the public, and you should take a look at management concerns before making investments in AI – in Microsoft or other technological actions.
A recent Motley Fool research report examined how five of the “magnificent seven” discuss AI subjects on their winning calls in the first three quarters of the calendar year 2024.
None of the technology giants spent much time on AI’s risks, but Microsoft has stood out as a leading risk analyst.
Amazon(Nasdaq: Amzn) Consecrated only 4% of its AI mentions to risk factors, focused mainly on the high costs of creating powerful AI services. Apple(Nasdaq: aappl) gave even less space for discussions on risks, with only 3% of the mentions centered on strict regulations slowing down the deployment of Apple AI tools.
Microsoft adopted a different approach and directed 10% of its AI mentions to risk analysis. More broadly, the company has linked almost all of its AI speaking to the ASA AI assistant tool and to the Azure Cloud Computing platform, and the risk discussion has remained in these guards to develop a theme of extreme demand, which makes it difficult to satisfy each order for the Azure and Copilot services.
Microsoft’s CEO, Satya Nadella, is not surprised by the demand for the demand for generative AI services, but the limitations of the real world always make it difficult to capitalize on this request.
“We have obviously encountered many external constraints because this request appeared fairly quickly, right?” Nadella said about the Q1 2025 Income Call In October 2024. “We encountered a set of constraints, which are all because (data centers) (DCS) are not built overnight. There are DC. There is power. And therefore it was the short -term constraint.”
Strengthening many data center capacities and securing large -scale power supply flows is a slow and expensive process, but Microsoft builds assets with massive long -term value.
Despite its enormous commercial scale and generous infrastructure investments, Microsoft is still struggling to meet AI demand.
During the April 2024 call, financial director Amy Hood noted that “short -term AI demand is a little higher than our available capacity”.
Three months later, Hood explained that the Azure IA request “remained higher than our available capacity.”
I just showed you the October Call, where Nadella highlighted the “constraints” holding Microsoft AI affairs. On the same call, Hood said that “demand continues to be greater than our available capacity”.
Stressing towards the appeal of the second quarter of last month, Hood simply repeated his analysis of the request from October. There is no stop of the influx of orders related to AI for IT capacity based on the Azure Cloud.
More recently, the Chinese engine Deepseek has become a threat to current AI leaders. A small team with a modest budget for computer equipment can generate AI results comparable to large budget leaders. Of course, Deepseek often appeared during the call for the second quarter, earning more than 8% of the total discussion of the Microsoft AI.
Nadella said the AI market is developing a bit like the old -fashioned IT industry. The new innovations reduce costs and improve the quality of IT services, and the whole market always adapts to a constant flow of game changes.
“Obviously, now that everything becomes commodity and that it will be widely used,” said Nadella. “And the big beneficiaries of any software cycle like that of customers.”
Deepseek therefore presents new risks for Microsoft AI activities, but it is also a normal and healthy part of this emerging market. We are about to discover what is happening when technological giants with a deep pocket apply huge data centers and computer budgets to the same technology that has done wonders on a limited scale of Deepseek.
In the end, the IA tools of the phone in your pocket with cloud solutions on a massive scale will benefit from unexpected challenges such as the Deepseek approach. And that is why you will not be stuck with the quality of today’s AI in the long term, just as you do not use the Pentium or Windows 3.1 processors in 2025.
You cannot stop progress. You can only slow down. But why would you like?
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of the board of directors of Motley Fool’s. Anders Bylund has positions in Amazon. The Motley Fool has positions and recommends Amazon, Apple and Microsoft. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.
