Microsoft Corporation soared to a historic pinnacle following the enlistment of OpenAI co-founders Sam Altman and Greg Brockman to spearhead its avant-garde in-house advanced artificial intelligence research unit.
During the initial minutes of regular trading hours on Monday, Microsoft’s shares experienced a surge of up to 2%, reclaiming a substantial portion of the losses incurred on Friday afternoon after the unexpected removal of CEO Sam Altman by the OpenAI board.
The headquarters in Redmond, Washington witnessed a slight dip in the company’s shares on Friday, coinciding with Altman’s abrupt departure from the architect of ChatGPT. However, the shares rebounded on Monday, registering a notable 1.9% increase.
Analysts, unfazed by Altman’s termination, expressed optimism, affirming that the OpenAI-Microsoft relationship would remain unaffected. They welcomed Altman’s transition to a new role at the Windows software giant.
Evercore ISI analyst Kirk Materne, in a note, described this development as a “clear win” for Microsoft, mitigating concerns related to potential short-term uncertainties at OpenAI.
Simultaneously, OpenAI’s board made the unconventional decision to replace Altman with Emmett Shear, the former CEO of Twitch, rebuffing calls from investors to reinstate the ousted chief. In a separate report, Wired disclosed that approximately 500 OpenAI employees had issued a collective ultimatum, threatening to depart the startup and join Altman at Microsoft unless the board accedes to their demand for resignation and Altman’s reinstatement as CEO.
“While it remains to be seen how much ‘brain drain’ there will be at OpenAI, we think the fundamental risk to Microsoft is largely contained with Altman and team on board,” opined Materne.
Recent weeks have witnessed a resurgence in technology stocks, buoyed by optimism stemming from a decline in inflation, signaling a potential conclusion to the Federal Reserve’s rate-raising cycle. This upward momentum has propelled both Apple Inc. and Microsoft toward the coveted $3 trillion market capitalizations.
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