Microsoft shares hit record after OpenAI hires

By Leah Montebello



dmg media (UK)

City & Finance

Microsoft shares hit an all-time high yesterday after it hired openAi’s co-founders to lead its artificial intelligence team. the tech giant, which owns around 49pc of openAi, signed up sam Altman and Greg Brockman – days after they left the company behind chatGPt san francisco-based openAi ousted Altman before Brockman stood down. their appointments sent Microsoft shares up more than 2pc to a record high close to $380 – valuing it at £2.2trillion. the rally follows a tumultuous weekend for the openAi board, which dramatically fired Altman as chief executive on friday evening over concerns about his leadership. this sent shockwaves through the industry and caused major backlash from staff and shareholders – including Microsoft, which first invested in the group in 2019. Brockman said on saturday he would also leave the company he helped build following Altman’s exit. in a dramatic U-turn, the board then tried to reinstate Altman over the weekend. Yet their efforts proved to be futile, and Microsoft managed to tap both Altman and Brockman for its new ‘advanced Ai research’ unit. Announcing the appointment yesterday morning, Microsoft chief satya Nadella said he was ‘excited’ to work with the pair and would provide them with ‘with the resources needed for their success’. But he insisted the tech giant ‘remains committed’ to openAi. in response to Nadella’s post on X, formerly known as twitter, Altman said: ‘the mission continues.’ openAi exploded in popularity this year thanks to its generative Ai chatbot chatGPt. the chatGPt bot can pass exams and write poems, books and software code. it has the potential to make untold billions of dollars for its creators and investors. But Kirk Materne, analyst at Evercore, said openAi’s boardroom saga was a ‘clear win’ for Microsoft, which has been in an arms race with the likes of Google to dominate the world of Ai. ‘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,’ he said. Hundreds of openAi employees last night signed a letter demanding that either openAi’s remaining board members resign or those openAi employees will join Altman’s new venture at Microsoft. signatories include some of openAi’s most senior executives, including former interim chief executive Mira Murati and openAi chief operating officer Brad Lightcap. Murati was briefly appointed as chief executive following Altman’s exit but was replaced yesterday morning with twitch co-founder Emmett shear. Dan ives, analyst at Wedbush, said: ‘the train wreck situation at openAi might go down as the one of the biggest debacle decisions in the history of silicon Valley.’ Danni Hewson, head of financial analysis at AJ Bell, said: ‘What now happens to open Ai? Will its workforce follow through on threats to resign if the current board doesn’t quit? that’s another chapter which is likely to keep us hooked on this story.’