Microsoft’s $276 billion opportunity (that isn’t a crazy quantum chip)
Welcome to AI Collision 💥,
In today’s collision between AI and our world:
- Microsoft using AI to level up
- Is this a bigger short term opportunity than AI or quantum?
- Another multi-billion dollar AI start-up valuation
If that’s enough to get the gamers plugging in, read on…
AI Collision 💥
Microsoft is having quite the week.
From inventing new matter in the form of topoconductors for its quantum computing chip – which not only could change computing as we know it, but physics too – to the release of AI-powered Xbox real-time game creation, it feels like Microsoft (MSFT) is fast moving away from Outlook and Word titan to the most diverse tech company on earth.
Hand it to CEO Satya Nadella – he was a damn fine replacement for Steve Ballmer in 2014.
Just how damn fine?
Let me show you the best way I know how…
The Microsoft stock price on a chart from 2000 to 2014 (Ballmer’s reign) and from 2014 to today (Nadella’s reign).
Maybe, it was luck? After all Ballmer did have to contend with 2008. Or maybe it’s the fact you’d never, ever, ever, ever see Nadella like this:
Instead, if you want to get a look into how Nadella’s mind works, I highly suggest you take the hour or so to watch him on this podcast. He discusses the new quantum chip, artificial intelligence and everything Microsoft has cooking:
There’s been a lot of whizz-bang stuff Microsoft has been talking about recently – from its $80 billion spend this year on AI infrastructure, to its reboot of the Three Mile Island nuclear plant, to its collaboration with OpenAI, to the release of the physics-bending topoconductors. But it was a post Nadella put on X.com amid the quantum chip news that showed us a glimpse of something arguably more important in the short term than anything else Microsoft is working on.
Microsoft calls this AI model “Muse”.
It’s a generative AI model that creates real-time worlds and gameplay based on a players actions, controller movements and in-game actions.
One of the novel applications of this is the ability to play historic games from previous gaming consoles. The problem with new advanced hardware is that old games are usually not compatible. They just simple aren’t built to run with modern hardware.
As Microsoft explains,
Today, countless classic games tied to aging hardware are no longer playable by most people. Thanks to this breakthrough, we are exploring the potential for Muse to take older back catalog games from our studios and optimize them for any device. We believe this could radically change how we preserve and experience classic games in the future and make them accessible to more players.
Further along, Muse could create unique bespoke gaming experiences for players. Think about playing your favourite open-world game. The experience you have is like no one else that plays it, custom to your preferences and actions. Personalised in every way, all done in real time by AI.
Over the next eight years the online gaming market is projected to grow to as much as $276 billion. I think the rise of AI in gaming will push that number higher. It also reinforces why it was such a big deal for Microsoft to acquire Activision Blizzard in October 2023 – which almost didn’t go through because of global anti-competition regulators.
The $69 billion deal might start to look like a bargain if Microsoft, through Xbox, can roll out AI in a meaningful and revenue-generating way.
For all the promise of Microsoft’s other businesses – be it Azure, its Business and Productivity services, or devices for that matter – I think it might be gaming where it really sees the biggest short-term growth opportunity.
A Whole New Way to Play AI in 2025
35 minutes from Oxford, behind military-grade surveillance and armed guard, is a development that could remap our economy.
It’s predicted it could add as much as £400 billion by 2030. This is one of the biggest financial opportunities I’ve ever seen… in any market… in any asset… and in any sector.
Boomers & Busters 💰
AI and AI-related stocks moving and shaking up the markets this week. (All performance data below over the rolling week).
Boom 📈
- Gorilla Technology (NASDAQ:GRRR) up 13%
- Intel (NASDAQ:INTC) up 5%
- EchoIQ (ASX:EIQ) up 5%
Bust 📉
- BigBear.ai (NYSE:BBAI) down 24%
- Palantir (NASDAQ:PLTR) down 15%
- Vertiv (NYSE:VRT) down 11%
From the hive mind 🧠
- This may be the biggest AI news of the week! Considering everything that’s been going on, I don’t say that lightly. But the intersection of AI with genomics is a game changer.
- Carrying on the theme of AI and medical science, here’s another example of how AI is set to transform how we look at disease, illness and medical therapies.
- It was a start-up yesterday with a few hundred million invested and a $4 billion valuation. Today it’s another one, a few hundred million invested and a $3.3 billion valuation.
Artificial Polltelligence 🗳️
On the subject of gaming, I recently plugged in a Super Nintendo Classic and Nintendo Classic for my kids. They’re five and three, so I’m not so keen on them using the PlayStation yet.
However, I’ve had to put a HDMI switch on the telly because I’ve run out of ports as the PS4 Pro, the NES, the SNES and an Amazon Fire Stick are all jockeying for spots.
It got me thinking about what else I could plug in for the kids. I’m keen to get my hands on a Sega Dreamcast, maybe a N64 if I can, a Mega Drive… (my wife’s going to kill me if I do this…).
Then I thought, if I had to pick one, the one that impacted my life most, what would it be? I couldn’t go past the NES. From Mario to Mario 2, Mario 3, Cobra Triangle, Battletoads, KungFu, Excitebike, Double Dragon… just so many groundbreaking games.
What about you? What’s your most favourite console over the years?
If I missed any off the list that you couldn’t have lived without, let me know in the comments.
Weirdest AI image of the day
ChatGPT’s random quote of the day
“There are only two kinds of programming languages: those people always bitch about and those nobody uses.”
— Bjarne Stroustrup
Thanks for reading, and don’t forget to leave comments and questions below,
Sam Volkering
Editor-in-Chief
AI Collision
WOW I am in.
I am in my late 70 and am cleaning out the loft, and have found
Double Dragon, Super Mario Land, Tetris all Japanese version
Prince of Persian USA in box
Black Jack with battery cover missing
Donkey Kong with up button jammed
l have no idea what these games are, or if they are worth anything
Depends on the condition of the boxes and packaging. If original game, factory sealed in excellent condition, then yes can be worth a lot of money. If it’s just the game, unboxed, without a box, or with a box and in poor condition, then the value is the nostalgia for someone, or maybe a few quid. All depends on the quality of packaging and contents (sealed original games are ultimate collectors items).
One of my favourite games is also one of the least sophisticated I have played. It was a game called Jet Pack, I had it ( still have it) on the Sinclair ZX Spectrum. I think Microsoft is definitely on to a winner if it can allow old favourites to be played on new machines. Judging by the waiting list and queues at my local PC gaming warehouse for Nvidia’s new graphics card it is safe to say that lots of money is flowing towards gaming and the equipment to get the very best experience out of those games.
I had an Amiga 500 with loads of games. Cannon Fodder was one of my favourites!!
hi sam,those were the days, i am optimist person, but i feel ai is not the way forward, it to powerful and uncontrolling, humans lie all the time what will happened when they get hand on it, i defie you to rely to my question,gerald
I trust that the guy in the light blue (well originally) shirt has access to better temperature controllers for his hardware than his human body heat management is demonstrating!
I have never had a gaming console not likely to – you can’t beat human interaction face to face— we are losing the personal touch if too much done on machine— but obviously useful