The stock market has spent this year moving from one artificial intelligence (AI) anxiety to another. But the endgame might be coming into view.<\/p>\n
Concerns about overinvestment in data centres seem to have subsided for the time being. Another issue however, might be on the horizon.<\/p>\n
Should you buy Microsoft shares today?\t<\/p>\n
Before you decide, please take a moment to review this report first. Despite ongoing uncertainties from US tariffs to global conflicts, Mark Rogers and his team believe many UK shares still trade at substantial discounts, offering savvy investors plenty of potential opportunities to learn about.<\/p>\n
That\u2019s why this could be an ideal time to secure this valuable research \u2013 Mark\u2019s analysts have scoured the markets to reveal 5 of his favourite long-term \u2018Buys\u2019. Please, don\u2019t make any big decisions before seeing them.<\/p>\n
The latest AI risk<\/p>\n
Microsoft (NASDAQ:MSFT<\/a>), Amazon and Alphabet have been spending big on data centres. And for a while, the question was whether this would actually generate any returns.<\/p>\n For the time being, that seems to have been answered \u2013 all three have reported strong growth in cloud computing revenues. But the new concern is where this is coming from.<\/p>\n Microsoft recently revealed that OpenAI now accounts for roughly 70% of its AI revenue and around 45% of its commercial backlog. That brings customer concentration risk on an epic scale.<\/p>\n In other cases, Anthropic is thought to be doing a lot of the heavy lifting. But the overall picture\u2019s clear \u2013 growth is coming from two companies and not much else.<\/p>\n Why this matters<\/p>\n This matters because both OpenAI and Anthropic are under pressure. In particular, they\u2019re facing a couple of major structural problems.<\/p>\n The biggest issue is cost. Most AI use doesn\u2019t need the leading model \u2013 something good enough at the lowest price will do \u2013 but Western labs are at a major cost disadvantage, partly due to higher energy prices.<\/p>\n In cases where cutting-edge products are important, staying at the front is expensive and difficult. The identity of the leading model seems to change almost every week.\u00a0<\/p>\n If OpenAI and Anthropic can\u2019t maintain a sustainable advantage, their ability to keep signing giant compute agreements could shrink. And that could impact future returns from AI investments.\u00a0<\/p>\n Microsoft\u2019s hedge<\/p>\n Microsoft appears to be acutely aware of this risk. It\u2019s looking to position itself as a platform that routes queries across different models, rather than committing to one.\u00a0<\/p>\n The immediate danger is that this might put pressure on the one customer driving Azure growth. And the fact it\u2019s a major shareholder in OpenAI is also worth noting.\u00a0<\/p>\n