Meta Platforms META and Microsoft MSFT have evolved as artificial intelligence (AI) powerhouses with significant investments in developing AI infrastructure and applications. While Meta Platform plans to invest between $64 billion and $72 billion, driven by Generative AI and core business needs, Microsoft expects capital expenditures to increase in the coming years to support growth in its cloud offerings and investments in AI infrastructure and training. Microsoft’s investment in Open AI has been a catalyst in driving the adoption of Generative AI.
According to IDC, the global AI infrastructure market is expected to surpass $200 billion in spending by 2028. AI adoption is expected to grow exponentially as hyperscalers, cloud service providers, private companies and federal governments plan to deploy and leverage AI. The massive opportunity bodes well for both Meta Platforms and Microsoft.
So, META or MSFT, which is a stronger pick now?
Meta Platforms focus on improving advertisers’ return on ad spending is a key catalyst. Its proprietary machine learning system, Andromeda, for retrieval in ad recommendation is powered by NVIDIA. AI is helping META better at targeting and finding the right audience for advertisers.
The launch of the new Generative Ads Recommendation model for ads ranking that is being used in Facebook Reels has increased conversion rates by 5%. Meta Platforms also saw 30% more advertisers using AI creative tools. Improvements in META’s recommendation system have led to a 7% increase in time spent on Facebook, a 6% increase on Instagram, and a 35% increase on Threads over the past six months.
Meta Platforms’ focus on making Meta AI the leading personal AI with a deepening emphasis on personalization, voice conversations, and entertainment is a key catalyst. The launch of Meta AI’s standalone app is a noteworthy development in this regard. Growing sales of Ray-Ban Meta AI glasses as well as Quest is noteworthy for META’s prospects.
Microsoft is benefiting from its strategy of infusing AI in its applications. The company has more than 60,000 Azure AI customers, up nearly 60% year over year. The Azure AI Foundry application and agent development hub has now been adopted by developers at more than 70,000 enterprises and digital-native companies.
Microsoft’s Azure AI Agent Service has been utilized by more than 10,000 organizations to build, deploy and scale agents. The company’s Phi small language models have gained significant traction, with 38 million downloads to date. In the development space, GitHub Copilot’s code review agent has handled more than eight million requests, while GitHub Copilot itself has surpassed 15 million users, representing more than fourfold growth year over year.
Microsoft 365 Copilot continues to expand its global footprint with hundreds of thousands of customers worldwide and usage is increasing threefold compared to the previous year. Microsoft Copilot has proven instrumental in enhancing employee productivity and creativity, with data from the Work Trend Index research showcasing potential time savings of up to 10 hours per month. Microsoft is now extending Copilot’s capabilities across its entire product spectrum, including Windows, Microsoft 365, Microsoft Teams and Edge. The adoption of Copilot Studio has been particularly strong, with more than 230,000 organizations, including 90% of the Fortune 500, implementing the technology.
