Analysts highlight Microsoft's massive Generative AI opportunity after 365 Copilot presentation

Yesterday, Microsoft (NASDAQ: MSFT) presented Copilot 365, which is currently in testing mode with selected customers.

The AI-powered tool combines large language models (LLMs) with business data and Microsoft 365 apps. First, it will be embedded in 365 apps - Word, Excel, PowerPoint, Outlook, Teams, etc. Secondly, Microsoft also announced Business chat.

“Microsoft 365 Copilot isn’t just a better way of doing the same things. It’s an entirely new way of working,” the company said in a press release.

For analysts covering Microsoft, the new tool illustrates the massive opportunity lying ahead of the tech giant. Barclays analyst Raimo Lenschow says the announcement is yet “another point of momentum for the company’s offerings.”

“Microsoft is showing an ability to well monetize Generative AI functionality, which now pointed at a base of nearly 500 million commercial Office users suggests a massive opportunity ahead,” Morgan Stanley analyst Keith Weiss wrote in a client note.

Oppenheimer analyst Timothy Horan is even more bullish.

“We believe what will make this differentiated product very difficult for rivals to emulate is the optimization of the LLM (exclusive GPT-3 license, access to OpenAI code and processes) with Microsoft's orchestration engine (OpenAI's supercomputer exclusively resides on Azure), linking to the enormous corpus of 1.5B users' existing ecosystem data and files and other applications through Graph,” Horan said.

By Senad Karaahmetovic

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