Following the announcement on Monday that Sam Altman, the former CEO of OpenAI, will be joining Microsoft to lead its artificial intelligence innovation division, the company’s stock hit a record high.
The tech giant’s shares increased 2.1% on Monday to close at an all-time high of $377.44, shattering the previous record of $376.17. This comes after a boardroom coup resulted in Sam Altman’s resignation from OpenAI on Friday, which caused Microsoft shares to drop 1.7%. With a $13 billion investment in the artificial intelligence company, Microsoft is by far the largest shareholder.
Altman’s hiring ended days of speculation that the former chief executive could return to the firm after his dramatic firing. Emmett Shear, former CEO of Amazon-owned streaming service Twitch, will replace OpenAI chief technology officer Mira Murati as interim chief executive.
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This year, Microsoft stock has increased by roughly 56%. The stock is one of the Magnificent Seven that have powered the lion’s share of the market’s returns this year, boosted by Wall Street’s bet that artificial intelligence is the next big thing in tech.Other members of the “Magnificent Seven” saw a boost on Monday. Nvidia shares gained 2.3% to end the trading session at $504.20 ahead of its earnings due on Tuesday, notching a record-high close for the chipmaker.
Dan Ives, tech analyst at Wedbush Securities, reiterated his $425 price target for Microsoft’s stock following the hiring of Altman’s and Brockman’s. “We view Microsoft now even in a stronger position from an AI perspective with Altman and Brockman” at the company, Ives wrote in a note on Monday.
With Altman’s unexpected dismissal, OpenAI, known for its generative AI chatbot ChatGPT, suffered a major setback. The appointment of Altman and Brockman as leaders of Microsoft’s AI research unit is viewed as a strategic move to secure Microsoft’s investment and expertise in the AI space, following its multibillion-dollar investment in artificial intelligence in January.
