Microsoft stock improves after hiring OpenAI outcast

Microsoft stock improves after hiring OpenAI outcast

Technology giant Microsoft, ranked as one of the world’s most valuable companies, has been rocked by turmoil at OpenAI, a small but influential artificial intelligence start-up founded as a non-profit. and who developed the ChatGPT chatbot.

The unexpected ouster on Friday of OpenAI co-founder and chief executive Sam Altman set off a chain of events that wiped tens of billions of dollars off Microsoft’s market value, a sign of how much OpenAI will mean to the tech giant. is important. Microsoft has invested more than $13 billion in OpenAI, and Apple, Google and Meta have rushed to catch up with their own AI offerings.

Microsoft’s stock, which has been on an upswing since Mr. Altman stepped down from OpenAI, declined on Friday and continued to fall in after-hours trading. The total decline of more than 2 percent translated into a huge loss of value for a company with a market capitalization close to $3 trillion.

Microsoft’s stock price served as a referendum of sorts on its partnership with OpenAI. Microsoft spent the weekend attempting to persuade OpenAI’s board to reinstate Mr. Altman, a charismatic, well-connected founder in Silicon Valley who was also pitching a new AI start-up to investors at the time.

Finally, Microsoft said late Sunday that it would hire Mr. Altman and Greg Brockman, OpenAI’s chairman and co-founder of the company, who stepped down in solidarity with Mr. Altman. According to Microsoft Chief Executive Officer Satya Nadella, the two men will lead an advanced research lab at Microsoft that will “set a new pace for innovation”.

Microsoft’s stock rose about 1.5 percent in early trading Monday, largely recovering from an earlier decline. Analysts applauded Microsoft’s move to hire OpenAI Outcast.

“While the events of the weekend were surprising and worrying, ultimately we believe Microsoft is actually in a stronger position than before when it comes to AI,” RBC analysts wrote in a research note.

According to Macquarie researchers, “We think Mr Nadella may have scored his coup by securing the most important part of OpenAI: its ambitious talent.” And some believe the high-level play over control of OpenAI could ultimately be a good thing for big companies like Microsoft that are beginning to commercialize their AI capabilities. According to Oppenheimer analysts, “This publicity will attract greater investment and enterprise attention to AI.”

OpenAI named its second interim chief executive in as many days, replacing former Twitch chief executive Emmett Shearer. Mira Muratti, a longtime OpenAI executive, was initially named interim head after Mr. Altman’s departure.

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