Microsoft has overtaken Apple to become the world’s largest company by market capitalization, helped by its deep focus on generative artificial intelligence (AI), a sector that is gaining favor with investors.

The tech giant, which along with Nvidia and Amazon places a significant emphasis on AI, has experienced significant market growth over the past year. Specifically, Microsoft’s market value has grown by more than $1 trillion.

Analysts draw parallels between this shift and the early 2000s, when technology and Internet companies began to displace consumer and financial firms from the top spots in the upper echelons of the market.

According to LSEG data, Microsoft has a market value of $2.887 trillion, the highest in the company’s history, while Apple’s market value at the close of trading Friday was $2.875 trillion after peaking at $3.081 trillion on Dec. 14.

Microsoft has incorporated OpenAI technology into its productivity suite, a move that helped spark a rebound in its cloud computing business in the July-September quarter. Its leadership in AI has also created an opportunity to challenge Google’s dominance in Web search.

Apple, on the other hand, is facing challenges from falling demand, including for its flagship product, the iPhone.

The company is having particular difficulty in China, a key market where economic recovery from the COVID-19 pandemic has been sluggish and competition from a resurgent Huawei is intensifying, affecting its market share.

Other AI-focused tech players such as Nvidia, Meta Platforms and Alphabet have also witnessed a big jump in their market capitalization in the past year.