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- The rise of ChatGPT has triggered an AI war among Big Tech companies, Wedbush's Dan Ives said.
- Blue-chip tech giants are racing to integrate intelligent language tools into their search engines.
- "It's a 'Game of Thrones' battle between Microsoft and Google and Apple," strategist Ives told CNBC.
ChatGPT's red-hot rise has triggered a "Game of Thrones"-style war over artificial intelligence among Big Tech companies, according to Wedbush Securities analyst Dan Ives.
Ives said the chatbot's surge in popularity at the start of 2023 has started an arms race between tech giants that represent some of the US's most valuable stocks.
"You look at what's happened — it's a 'Game of Thrones' battle between Microsoft and Google, and Apple that's just quietly sitting there right now," he told "CNBC Special: Taking Stock" on Tuesday.
"Everyone's trying to figure out who's going to be the winners," Ives said.
Big Tech players are scrambling to respond to ChatGPT, the intelligent language tool that's taken the internet by storm with its ability to write academic essays and even pass some college-level exams.
Microsoft was an early investor in ChatGPT's parent company OpenAI, and it has already said it plans to integrate the chatbot tech into its search engine, Bing.
Meanwhile, Google parent Alphabet is developing a homegrown ChatGPT alternative called Bard. However, the company's market capitalization plunged $100 billion last week after Reuters noted that an advertisement for its newly-unveiled AI chatbot contained incorrect information.
"Clearly right now, in terms of top of the mountain, it's [CEO Satya] Nadella and Microsoft because of ChatGPT and what we've seen," Ives said.
"Look at Google last week, when you rush things. That was a black eye moment for Google in terms of what we've seen with Bard."
Other tech players like Apple and Amazon could also soon wade into the AI tech war, according to the Wedbush analyst.
The two giants are yet to set out their approach to ChatGPT, but they're unlikely to allow the bot's surge in popularity to benefit their competitors without putting up a fight, he said.
"I believe Apple is going to have some significant AI announcements by this summer," Ives said.
"And then Amazon — Jassy's not just gonna sit there watching from the sidelines," he added, referring to the ecommerce giant's CEO Andy Jassy.
Big tech giants' commitment is what will ultimately set the AI boom apart from previous "hype cycles", according to Ives.
Stocks tied to innovations like crypto and the metaverse enjoyed brief bounces in 2021, but were then crushed as rising interest rates and a decline in investor enthusiasm battered the tech space last year.
"This is just starting. That's why in 2023, I don't view this as a 'hype cycle'. This is real spending, and that's the difference versus other hype cycles we've seen over the last few years," Ives said.