Microsoft is undoubtedly in the race to become the leader in AI-powered app development. At the Build event yesterday, Microsoft explained how it was extending its copilot applications and using the same standard for plugins developed by its partner OpenAI. This step allows developers to work across various apps such as ChatGPT, Bing Chat, Dynamics 365 Copilot, Microsoft 365 Copilot and the latest Windows Copilot.
Naturally, Microsoft’s competitors are also making strides in the AI development race. Google recently announced at the I/O event that its Bard system will soon be compatible with various Google and third-party apps like Adobe Firefly.
Despite the stiff competition, experts point out that Microsoft still has a few advantages which give it an edge over its rivals.
First of all, its partnership with OpenAI and being the first mover gives it an upper-hand. Microsoft’s brand strength is also a key factor. It has the potential to generate more attention and loyalty from the users. Finally, the company has its huge developer community which gives it the opportunity to gain more market share.
Microsoft needs to prove its worth to its developers fast. For this, it needs to be known as the go-to platform for developers who need easy access to AI capabilities.
In spite of its advantages, there are certain challenges that arise with the development of an app ecosystem. The use of APIs instead of hardware-dependent applications adds to this difficulty as there is no major switching cost. Furthermore, the growth of AI app development raises concerns about the implementation and maintenance of safety and security measures.
Matt Turck, a VC at FirstMark, believes that even though Microsoft is aggressively pushing towards AI app development, it is still too soon to determine if it will emerge victorious in this race. On one hand, Microsoft could reap the rewards of its investments in OpenAI if things go their way. On the other hand, enterprises are likely to resist encroachment by favoring open-source platforms, protecting their data by avoiding cloud providers, and customizing their services through multi-agents.
Therefore, Microsoft needs to make sure that it addresses these concerns and maintains its position as the leader in AI app development.
