Axios Closer

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February 02, 2024

Friday ✅.

Today's newsletter is 574 words, a 2-minute read.

🔔 The dashboard: The S&P 500 closed up 1.1%.

1 big thing: Microsoft on top

Illustration: Shoshana Gordon/Axios

Microsoft flaunted its head start in generative AI this week, Hope writes.

Why it matters: Investors increasingly want to see more results than hype.

Driving the news: Microsoft's server and cloud business, which includes Azure, grew 30% in the last three months of 2023 from the prior year, according to its latest earnings.

  • Generative AI contributed a 6 percentage point bump within that figure, CFO Amy Hood noted on the call.
  • And UBS analyst Karl Keirstead described the boost as "just extraordinary."

Elsewhere, competitors and peers had less substance to offer.

  • Google and Alphabet CEO Sundar Pichai shared sparse financial details about its "thousands of product advances, including broad Gen AI capabilities."
  • Meta CEO Mark Zuckerberg reflected on 2023 as a year where he and his team "established [an] AI effort."
  • Amazon CEO Andy Jassy described last year as "very significant" for customer trials for Gen AI, but said associated revenue in the context of the $100 billion AWS business is "still relatively small."
  • And Apple CEO Tim Cook said the company will talk about its generative AI work "later this year."

The big picture: Any first-mover advantage may shrink over time, but for now, investors clearly see Microsoft as leading the generative AI race.

  • The company's market cap stands at nearly $3.1 trillion — while Apple's has fallen to $2.9 trillion.
  • The size of Alphabet, Amazon and Meta are all currently below $2 trillion. (See below.)

💭 Our thought bubble: Any multiplier effects of AI may ultimately be difficult to measure.

  • After all, companies are not only building AI to improve customer-facing products but to use as tools for employees to save time.

2. Bonus chart: The AI bump

Data: YCharts; Chart: Axios Visuals

3. What's happening

💊 Publicis, an ad company that worked on OxyContin, agreed to pay $350 million in the first-ever opioid marketing settlement. (CNN)

⚠️ Tesla is recalling nearly all of its U.S. vehicles with a software update because some warning lights on the instrument panel are too small. (AP)

4. Rogan reaches new Spotify deal

Photo illustration: Sarah Grillo/Axios. Photo: Vivian Zink/Syfy/NBCU Photo Bank/NBCUniversal via Getty Images

Spotify announced a new multiyear deal to distribute "The Joe Rogan Experience" podcast today, Axios' Sara Fischer writes.

Flashback: Spotify first signed "The Joe Rogan Experience" exclusively back in 2020.

  • At the time, the company was investing much more in bringing popular podcasts exclusively to its platform. It's since backed away from that strategy in light of Wall Street pressure for profits.
  • But Rogan had the most popular podcast in America last year, per Edison Research.

Go deeper

5. On our watch list

Director Sean Wang at the 2024 Sundance Film Festival in Park City, Utah. Photo: Matt Winkelmeyer/Getty Images

Sean Wang won the U.S. dramatic audience award at the Sundance Film Festival for his feature debut "Dìdi (弟弟)" — little brother in Chinese — a coming-of-age story, Hope writes.

Why it matters: The institute behind the Park City, Utah, festival has helped to launch the careers of many top Hollywood filmmakers, including Ava DuVernay and Steven Soderbergh.

  • Previous films that have won the same award include "CODA" and "Whiplash," which eventually grabbed numerous Oscars.

The big picture: Critical praise aside, independent titles need to find buyers and Sundance also serves as a market.

  • Sales at the festival this year appeared on pace with last year, Sundance Institute CEO Joana Vicente told Marketplace.
  • Among them is "Dìdi (弟弟)," which was picked up by Focus Features.

6. What they're saying

"Maybe Bill Murray wrote the press release for the jobs number out today."
— John Petrides, portfolio manager at Tocqueville Asset Management, writing on LinkedIn about yet another stronger-than-expected jobs report — out today on Groundhog Day.

Today's newsletter was edited by Pete Gannon and copy edited by Sheryl Miller.

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