Microsoft Faces AI Backlash Amid Analyst Downgrade
Microsoft is facing criticism over its AI training methods, with some researchers warning that large language models could be seen as 'the largest theft of labor in human history.'
The debate centers on whether feeding human-written content into AI models constitutes fair use or exploitation. Despite this backlash, Microsoft's stock has been favored by investors, with a Strong Buy rating and a 12-month price target near $571.
However, one prominent analyst has downgraded the company to Hold, citing heavy capital expenditures and stagnant cloud gross margins compared to Alphabet's faster growth and expanding Google Cloud profitability.
Microsoft is pushing forward with its strategy of anchoring growth in AI, cloud, and enterprise software. The company is partnering with various firms to strengthen its Azure ecosystem and AI credentials, including deals with Marvell and Utimaco on the Azure Payment HSM v2 platform for cloud-based payment security.