Nvidia wins in all three AI futures, Morgan Stanley finds

Infrastructure providers positioned to win across AI scenarios

Morgan Stanley strategists examined three divergent paths the AI market could take over the next few years and reached a striking conclusion: the companies building computing infrastructure will thrive regardless of whether closed proprietary models or open-source alternatives ultimately dominate.

The bank's research note, first reported by Business Insider, modeled outcomes where closed AI systems maintain their lead, where open models catch up in capability, and where a hybrid approach emerges. While the specific winners shift between scenarios, one name appears in every case—Nvidia.

Three paths, different winners

In the closed model scenario, proprietary AI labs retain their advantage through superior performance, security, and ease of use. This outcome favors major cloud providers including Amazon and Google, along with suppliers of chips, networking equipment, and power infrastructure like Nvidia and Bloom Energy. Morgan Stanley doesn't officially cover private companies OpenAI and Anthropic, but these frontier labs would likely benefit most.

The hybrid scenario—which Morgan Stanley views as realistic—envisions businesses using premium closed models for complex tasks while deploying cheaper, customizable models for routine work. This would distribute AI across public clouds, private data centers, and company-owned hardware. Winners here include hyperscale cloud providers Amazon, Google, and Microsoft, plus software companies like Datadog, Palantir, CrowdStrike, Okta, and ServiceNow. Nvidia remains central.

In the open model scenario, freely available AI systems match proprietary ones in capability and usability. Lower costs would drive broader deployment, with more workloads running in company data centers or on local devices rather than centralized clouds. This benefits enterprise hardware makers, security software providers, and edge computing equipment suppliers. Microsoft would still perform well, but new winners emerge: Chinese AI labs and tech giants including MiniMax, Z.ai, Alibaba, and Tencent. Device makers Dell, HP, and Apple would thrive by enabling AI closer to end users. Nvidia wins again.

Why it matters

The analysis suggests investors and enterprises may be overweighting the debate between open and closed AI approaches. If AI adoption accelerates as expected, the companies supplying foundational infrastructure—semiconductors, cloud capacity, networking, and power—could prosper under any scenario. This has immediate implications for technology procurement strategies and capital allocation decisions, as the safe bet may be infrastructure rather than betting on a specific AI development model.

Cloud giants shift by scenario

While Nvidia appears as the clearest constant, cloud providers also feature prominently across all three futures, though their rankings change. Microsoft stands out in the open-model scenario, while Amazon and Google show strength if proprietary models remain dominant or the market settles into a hybrid approach.

The research was first reported by Business Insider's Aaron Barr.