Google is losing the war with ChatGPT, I trust Microsoft more, says Kevin O'Leary

Kevin O'Leary says that he is about to close a very interesting deal, namely the investment in OpenAI, which he has been highlighting so much in recent days. He believes in artificial intelligence so much that he calls it one of the potential winners of 2023. Why does he believe in Microsoft in particular in this regard?

Kevin O'Leary, star of Shark Tank, sees artificial intelligence (AI) as a huge investment opportunity and says it will likely be the fastest growing category in the markets in 2023, but also in his portfolio.

In an interview, O'Leary said: "Our plan is to give AI a weighting of 3.5-5% by the end of the year."

Since OpenAI launched ChatGPT in November, the bot has gone viral for its ability to post articles, listings and even date messages or create code and more. That has catalyzed a wave of investor interest in stocks with exposure to the sector, as well as a ''search engine war'' among tech giants.

  • In January, Microsoft invested $10 billion in OpenAI, and in recent days it enhanced its Bing search engine with ChatGPT-style technology.
  • It didn't take long for Google to unveil a competing service to its ChatGPT rival, Bardo, but it didn't see as much success because it faltered on its debut, sending $GOOGL+2.3% stock down significantly that day.
  • But gradually, more and more companies are joining in, be it US or Chinese companies, AI has unleashed a frenzy, with Chinese tech giant Baidu working on its own bot.

O'Leary expects competition to only increase. He now reportedly uses mostly ChatGPT for his queries instead of exclusively using Google's search engine, and plans to test Bing as well once it's fully functional with OpenAI's technology.

"ChatGPT is definitely a threat to Google and Google needs to know that," he said. "The market hasn't really punished Google stock for that. But in a few quarters, if ChatGPT starts bringing in significant subscriber fees, we'll see what happens. "

The main downside to Google is that it may have slept lightly at launch, while ChatGPT is attracting the attention of literally everyone, both users and investors. So while Google is perfecting its version of AI to fight Microsoft, meanwhile Microsoft is gaining ground and building on a strong foundation that is reaping positive feedback.

Still, O'Leary believes OpenAI's multi-billion dollar valuation remains "very, very extreme". Given the boom in artificial intelligence and the unlikely event that legislators and regulators restrict innovation, the investment potential remains high.

Anyone can be a winner; the biggest AI winner may even be a completely unknown candidate, O'Leary said. But one thing is already clear to O'Leary - " The loser is and will be Google," he argued. Unfortunately, he didn't elaborate more on this idea, so it's probably meant that integrating AI into Microsoft's search engine will likely steal a large market share from the dominant Google.

At the same time, O'Leary mentioned that he has been offered a private investment in OpenAI and said he could potentially take a stake in the next 90 days.

"I like to invest during the first move because these companies have a marketing advantage," O'Leary said on Tuesday's call.

"I'm currently looking at the ChatGPT deal from a private equity perspective and deciding how much of an allocation I want to put into it," O'Leary said. "I'm very happy to have been offered a piece of it."

He likened the AI technology to the nature of Amazon in the early 2000s, a company he was excited to invest in at the time. O'Leary stressed that AI is the next frontier in technology and has the potential to generate significant returns for investors.

Please note that this is not financial advice. Every investment must go through a thorough analysis.


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