Generative AI Revenue and Cloud Spending Insights

Generative AI Revenue and Cloud Spending Insights

Generative AI Revenue Figures

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This table provides an overview of estimated annual recurring revenue (ARR) for various companies involved in generative AI technologies, their categories, growth rates, and sources of information.

CompanyCategoryEst. ARRARR GrowthSource
AzureAI Development Platform$3.9B130%Morgan Stanley (9)
OpenAILLMs / Chatbot$3.4B113%Link
AmazonAll Amazon AI Products"Multibillion-dollar run rate"NALink
GoogleAll Google AI Products"Billions in revenues"NALink
Microsoft 365Productivity Copilot$1.2B319%Morgan Stanley (9)
ScaleData Annotation and Labeling$675M200%Link
AccentureAI Consulting$500MNALink
GitHub CopilotCoding Copilot$211M144%Morgan Stanley (9)
VASTAI Computing Platform$200M230%Link
JasperMarketing Copy Generation$90MNALink
GleanEnterprise Knowledge Mgmt.$55MNALink
PerplexityConversational Search Engine$35M600%Link
CohereLLMs / Chatbot$35M169%Link
HarveyLegal AI Copilot$25MNALink
RunwayVideo Generation$25MNALink
HeyGenVideo Generation$20M1,900%Link

Summary of Points:

  • Azure's Dominance: As a significant player in the AI development platform space, Azure's estimated ARR of $3.9 billion showcases its potential in the cloud computing and AI integration markets, projected to grow 130% by 2025.

  • OpenAI's Growth: OpenAI continues to show robust growth with an estimated $3.4 billion ARR for LLMs and chatbots, reflecting the increasing demand for conversational AI solutions.

  • Amazon and Google: While Amazon and Google report broad multi-billion dollar revenue runs, they haven't provided specific figures, indicating their extensive portfolio of AI products might be harder to quantify individually.

  • Microsoft's Strong Position: With an estimated $1.2 billion ARR from its productivity copilot, Microsoft highlights the efficiency gains AI can provide in business settings, coupled with a remarkable growth projection of 319%.

  • Scale's Expansion: The data annotation and labeling market is critical for training AI models, and Scale's growth to $675 million ARR (200% growth) indicates a booming need for data preparation services.

  • High Growth Companies: Companies like Perplexity and HeyGen exhibit extremely high growth rates (600% and 1,900% respectively), suggesting niche markets within AI are rapidly evolving and attracting significant investments.

  • Consulting Services: Accenture, with its AI consulting service estimated at $500 million, underscores the importance of supporting businesses in integrating AI technologies into their operations.

This data reveals the dynamic landscape of generative AI, showcasing established companies and emerging players while indicating substantial growth potential across the sector.

Reference:

www.morganstanley.com
[PDF] Thematics: Mapping AI's Diffusion - Morgan Stanley
www.morganstanley.com
Generative AI: Compounding Through the Hype - Morgan Stanley
www.morganstanley.com
How Generative AI Could Reshape Work | Morgan Stanley

Total Cloud CapEx Spending (ex. AMZN) 2013 – 2025E

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Overview

  • The graph illustrates the total capital expenditures (CapEx) on cloud services (excluding Amazon's spending) from 2013 to estimated figures for 2025.
  • There is a noticeable increasing trend in spending over the years, indicating a growing investment in cloud infrastructure.

Key Observations

  • Annual Spending Growth:
    • Spending started at 28Bin2013andconsistentlyincreasedeachyear,reaching28B in 2013 and consistently increased each year, reaching 95B in 2021.
    • The projected spending for 2024 and 2025 is 182Band182B and 196B, respectively, showcasing a significant upward trajectory.

Data Summary

YearCapEx Spending
2013$28B
2014$35B
2015$39B
2016$45B
2017$52B
2018$81B
2019$75B
2020$79B
2021$95B
2022$118B
2023$120B
2024E$182B
2025E$196B

Cumulative Spending Insight

  • The cumulative CapEx spending is projected to reach $378B by the end of 2025. This figure reflects the total investments made over the entire period from 2013 to 2025, emphasizing the importance of cloud infrastructure in the tech landscape.

Implications

  • The consistent increase in CapEx spending suggests robust demand and a shift towards cloud-based solutions across industries, potentially driven by digital transformation trends and the expansion of services offered by cloud providers.
  • Understanding these trends can help businesses strategize their cloud investments and gauge market opportunities in the expanding cloud technology sector.

Reference:

www.investors.com
Cloud Capex Spending Binge To Continue In 2025, Aiding Super ...
www.datagravity.dev
$150B+ of Annual CAPEX: The trends in Capital Expenditures by ...
platformonomics.com
Follow the CAPEX: Cloud Table Stakes 2023 Retrospective

AI Beneficiaries Stock Performance

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Overview

The image presents a comparison of stock performance for various companies significantly impacted by AI developments from November 30, 2022, to August 9, 2024. It highlights substantial growth in tech companies, particularly in sectors like data centers and semiconductors.

Key Points

  1. Supermicro (Data Center Servers & Storage)

    • Performance: +464% from Nov. 2022; sees a decline of -57% from its peak.
    • Thoughts: Supermicro's growth indicates strong demand for data center infrastructure, likely driven by the AI boom. The sharp decline from the peak suggests market corrections or profit-taking.
  2. NVIDIA (Semiconductors)

    • Performance: +519% since Nov. 2022; declined -23% from its peak.
    • Thoughts: NVIDIA, a leader in GPU technology used in AI applications, reflects the ongoing demand for AI computing power. The decline from peak performance may indicate market maturity or fluctuations in tech stock valuations.
  3. Vertiv (Power, Cooling, and IT Infrastructure)

    • Performance: +416% since Nov. 2022; decreased -33% from peak.
    • Thoughts: Vertiv's growth is likely tied to the essential nature of cooling and power solutions for expanding data centers. The pullback from peak shows volatility in IT infrastructure-related stocks.
  4. Dell (IT Infrastructure Products & Services)

    • Performance: +107% since Nov. 2022; down -48% from peak.
    • Thoughts: Dell's slower growth compared to others might reflect its broader portfolio and competition in AI-focused infrastructure. The significant decline from its peak indicates a challenging market or shifts in customer demand.
  5. TSMC (Semiconductors)

    • Performance: +91% since Nov. 2022; down -14% from peak.
    • Thoughts: As a key player in semiconductor manufacturing, TSMC's growth shows robust demand for chips. The dip from peak performance may relate to broader industry challenges or supply chain issues.
  6. Micron (Semiconductors)

    • Performance: +61% since Nov. 2022; down -39% from peak.
    • Thoughts: Micron’s slower growth indicates competitive pressures in memory markets, especially amid AI's increasing demand for high-performance memory solutions. The decline from peak highlights volatility in semiconductor stocks.

Summary Table

CompanySectorPerformance (Nov. 2022)Change from Peak
SupermicroData Center Servers & Storage+464%-57%
NVIDIASemiconductors+519%-23%
VertivPower, Cooling, and IT Infra+416%-33%
DellIT Infrastructure Products+107%-48%
TSMCSemiconductors+91%-14%
MicronSemiconductors+61%-39%