Microsoft is the real winner of the OpenAI chaos that reigned over the weekend, and its rallying stock price is indicative of that. Upon the shocking news that OpenAI’s board had unexpectedly fired CEO Sam Altman on Friday, reportedly to due internal strife over OpenAI’s direction, Microsoft stock dropped more than 2% in after-hours trading, potentially wiping out tens of millions in market value. But after Microsoft CEO Satya Nadella announced early Monday morning the company has now hired Altman and OpenAI co-founder Greg Brockman, who also left in protest of Altman’s firing, Microsoft stock is once again climbing.
Wall Street investors, like many in the tech industry, seem to be placing their bets on OpenAI’s co-founders and team, rather than solely on the future of Microsoft’s relationship with the AI startup in which it’s invested over $13 billion as a means of competing with other tech giants, like Google and Meta, on AI offerings.
As news of Altman’s departure broke over the weekend, Microsoft’s stock price dipped — a clear example of how closely the fates of the two companies had become intertwined. By the end of the day, Microsoft was down 1.68% to $369.85. The decline continued over the weekend, even as word that OpenAI was trying to reinstate Altman. But after Nadella announced Microsoft would hire Altman and Brockman, “setting a pace for new innovation,” Microsoft’s stock once again began to rise on Monday morning, recovering from most of its earlier decline.
In early morning trading, Microsoft’s stock was up by over 2%, gaining back much of its losses from the OpenAI saga. It also hit an all-time high of $377.10 at one point, Forbes noted.
Analysts believe that Microsoft is now on the right track, as it not only has pulled in the leadership of OpenAI (and likely more of the team over time as they defect to join the former OpenAI co-founders at their new home), but it also has maintained its relationship with OpenAI for use of its technology in the near-term. Already, Brockman has announced OpenAI defectors including Jakub Pachocki, and Szymon Sidor and Aleksander Madry will be joining Microsoft to help lead the new AI team.