Microsoft Stock
The tech world was rocked by the recent upheaval at OpenAI, a prominent artificial intelligence start-up known for developing the ChatGPT chatbot. The unexpected departure of Sam Altman, OpenAI’s co-founder and CEO, sent shockwaves through the industry and had a significant impact on Microsoft, one of OpenAI’s key partners. However, Microsoft quickly found a way to turn the situation around, leading to a surge in its stock price and the praise of analysts.
Microsoft has a substantial investment in OpenAI, totaling over $13 billion. The sudden departure of Altman caused Microsoft’s market value to plummet, highlighting the importance of OpenAI to the tech giant. Recognizing the significance of the situation, Microsoft took swift action over the weekend to convince OpenAI’s board to reinstate Altman. In a surprising turn of events, Microsoft announced on Sunday that Altman, along with Greg Brockman, OpenAI’s president and co-founder, would be joining Microsoft to lead an advanced research lab.
The news of Microsoft’s strategic move to hire the OpenAI outcasts had an immediate positive effect on the company’s stock. On Monday, Microsoft’s stock rebounded and reached a record high, rising over 2 percent. The market rally extended beyond Microsoft, with other AI-related companies, such as Nvidia and Broadcom, also experiencing new highs. The tech-heavy Nasdaq index closed up 1.13 percent on Monday.
Microsoft’s stock had already been on an upward trajectory due to its strong financial performance in the previous quarter. With a closing price of $377.44 per share on Monday, Microsoft surpassed its previous record of approximately $376.20 set just days before. Analysts at RBC expressed confidence in Microsoft’s position, stating that the company is now even stronger when it comes to AI.
The majority of OpenAI’s staff, including top-ranking members, signed a letter threatening to leave the start-up for Microsoft if Altman was not reinstated as the company’s leader. This show of support from OpenAI’s talented workforce was seen as a significant win for Microsoft. Researchers at Macquarie commented, “It appears Mr. Nadella has orchestrated a strategic move, securing OpenAI’s crucial asset: its ambitious and talented team.”
Analysts at Oppenheimer believe that the high-stakes drama surrounding the control of OpenAI could ultimately benefit companies like Microsoft that are focusing on commercializing their AI capabilities. The publicity generated by this event is expected to attract further investment and enterprise attention to AI.
In response to Altman’s departure, OpenAI appointed Emmett Shear, the former CEO of Twitch, as its second interim chief executive in just two days. Mira Murati, a long-time OpenAI executive, initially assumed the role of interim chief after Altman’s departure.
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