Microsoft's AI Endgame Risks Stock Market Crash

The stock market has been driven by AI anxiety this year, but it seems that Microsoft's (NASDAQ:MSFT) endgame is coming into view.

Microsoft, Amazon, and Alphabet have invested heavily in data centers, which initially raised concerns about their potential for returns. However, all three companies have reported strong growth in cloud computing revenues, with Microsoft attributing 70% of its AI revenue to OpenAI and 45% of its commercial backlog to the same company.

This customer concentration risk has sparked concerns that if OpenAI and Anthropic cannot maintain a sustainable advantage, their ability to sign giant compute agreements will shrink, impacting future returns from AI investments.

Microsoft appears to be aware of this risk and is positioning itself as a platform that routes queries across different models, rather than committing to one. This strategy could put pressure on OpenAI, which is also a major shareholder in the company.