Microsoft Corp. moved quickly to turn a negative into a positive, and that helped it win Wall Street’s cheers Monday.
When news broke late Friday that OpenAI’s board had ousted Sam Altman as its chief executive, Microsoft shares
But after some weekend dramatics, analysts say Microsoft might be in an even better position than it was before, having now brought on Altman to head a new advanced AI research team that will count former OpenAI president Greg Brockman and other ex-OpenAI staffers as members.
Microsoft shares finished up 2.1% Monday to close at a new record of $377.44.
“While we don’t think this story is over, former OpenAI CEO Sam Altman and key employees are Microsoft employees for now, a major?MSFT?win,” Oppenheimer analyst Timothy Horan wrote in a note to clients Monday.
The arrangement is “a win/win for?MSFT?as it still has full access to the best LLMs [large-language models] and now the team to possibly make the next great LLM and the best AI minds in the world to help implement AI,” he continued.
Macquarie analyst Frederick Havemeyer weighed in similarly, offering that Microsoft Chief Executive Satya Nadella “may have just pulled off a coup of his own.”
If many OpenAI staffers follow Altman and Brockman to Microsoft, the tech powerhouse would “be effectively acquiring OpenAI’s core differentiation — its ambitious and experienced technical talent,” while keeping licensing rights to OpenAI’s intellectual property.
Evercore ISI’s Kirk Materne also called the developments “a clear win” for Microsoft, noting that they should help ease concerns about uncertainty at OpenAI.
“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,” Materne wrote. “And when taking a long-term view, hiring Altman and team might end up being a better outcome vs the prior status quo.”
Admittedly, “there is still some risk to Azure if OpenAI growth were to materially slow, but we think the long-term opportunity around GenAI for Microsoft trumps any near-term risk associated with the OpenAI disruption,” he continued.