Artificial intelligence technology has taken the tech world by storm this year with the popularity of the large language model-powered ChatGPT and the wider adoption of generative AI by enterprises.

The AI frenzy isn't expected to die down anytime soon, and an analyst at Morgan Stanley is underlining key AI debates that will likely be triggered in the upcoming year.

Analyst Brian Nowak said these AI developments will have meaningful ramifications for the internet industry, tech sector and overall economy.

Personal AI Assistants: One of the debates will be centered around which companies will launch and scale the most compelling generative AI-enabled personal digital assistants, Nowak said in a recent note. Companies will likely focus on progressing toward a universal interface, removing friction and agentic AI integration, he said. These factors will determine user adoption and engagement, he said.

Nowak sees Alphabet, Inc. (GOOG  ) (GOOGL  ) as the best-positioned to enable personal AI assistant technology, followed by Amazon, Inc. (AMZN  ), Apple, Inc. (AAPL  ) and Meta Platforms, Inc. (META  ).

Future Of Search: Alphabet's OpenAI rival Gemini will likely improve accuracy rates and reduce hallucination and likely narrow the competitive gap between OpenAI and Google, Nowak said.

AI Creator Tools: All eyes are on whether 2024 will see scaled generative AI creative tools and how these will impact broader engagement trends, the analyst said. The firm noted that text-to-image, voice-to-image, text-to-video, voice-to-video, creator chat bots and other generative AI creative tools are either available or on their way.

SMID-Cap AI Beneficiaries: Nowak delved into whether small-to-mid-cap companies can become beneficiaries of AI. Some SMID-cap internet companies that are investing in AI are already seeing material performance improvements faster than mega-caps, he said.

The analyst sees opportunities across online advertising with companies such as Snap, Inc. (SNAP  ) and Pinterest, Inc. (PINS  ); e-commerce companies such as Chewy, Inc. (CHWY  ) and Etsy, Inc. (ETSY  ); and video game software companies.

AI ASIC Adoption: There will be debate around whether AI application-specific integrated circuits can replace Nvidia Corp.'s (NVDA  ) GPUs, Nowak said.

Amazon has developed Inferentia and Trainium, Google has made custom silicon a key pillar of its AI strategies and Meta is working on its own custom silicon, the analyst said. Microsoft recently announced its Maia 100 AI accelerator, he added.

"Whether these factors are enough to offset developer familiarity and comfort using NVDA GPUs and CUDA remains to be seen," Nowak said.

AI Regulation: Another key topic will be whether there will be more AI regulation in 2024 and if it will have implications for the tech sector, the analyst said.

"We expect regulatory efforts to ratchet up in '24, which should paint a clearer picture of the shape and ultimate outcome of regulatory efforts across the globe," he said.

Foundational Model Market Share: "With new and updated foundational models released every month, we can't help but wonder how many multi-purpose large language models we will ultimately have," Nowak said. Customers are likely to be compelled to use the most advanced foundational model in their applications to have an edge over competition, he said.

"Largest model will be appropriate for certain general tasks, specialized foundational models could emerge that are more efficient/offer better price performance for specialized tasks, leaving room for multiple competitive foundational models," the analyst said.

Robotics: The next step in robotics development will likely be powered by generative AI, in Morgan Stanley's view.

Health Care: Stakeholders will likely be interested in finding out whether generative AI health care advances enable big tech companies to have a more meaningful presence and impact within the health care sector, Nowak said. Alphabet, Amazon and Apple are among the companies to watch on this front, the analyst said.

For users, applying GenAI to personal health data can unlock brand new experiences, Nowak said.

Alphabet recently demoed that its new Google Assistant can monitor a users' health and fitness trends, and help explain abnormalities such as why a running workout was likely slower because the user slept less recently, he said. This will pave the way for a personal fitness/health coach, eventually resulting in consumer-centric healthcare, he said.

Google, with Android, and Amazon, with Alexa, are well-positioned to usher in these new experiences, Nowak said.

Autonomous Vehicles: It remains to be seen whether the capabilities of autonomous vehicles will likely accelerate with AI improvements, the analyst said. Alphabet, Amazon, Tesla, Inc. (TSLA  ) and General Motors Corp. (GM  ) are the key companies to watch on this front, he said.