Microsoft Stock Rose After Announcing a “Multi Billion” Investment in ChatGPT Developer OpenAI

Microsoft Stock

Microsoft Stock (NASDAQ:MSFT)

After the computer giant Microsoft (NASDAQ:MSFT) announced a “multiyear, multimillion-dollar” investment in ChatGPT developer OpenAI, Microsoft stock jumped in early trade on Monday.

In a statement, Microsoft Chairman and CEO Satya Nadella described the motivation for the company’s decision to collaborate with OpenAI as a “shared aim to responsibly advance cutting-edge AI research and democratize AI as a new technology platform.” “During this next phase of our cooperation, developers and businesses across a wide range of sectors will have access to the greatest artificial intelligence infrastructure, models, and toolchain with Azure to create and execute their apps.”

OpenAI CEO Sam Altman said, “Microsoft shares our ideals, and we are eager to continue our independent research and work toward producing powerful AI that benefits everyone.”

With headquarters in Redmond, Washington, Bloomberg claimed that the investment would be valued at $10 billion. However, Microsoft (NASDAQ:MSFT) did not reveal the magnitude of the transaction.

It was reported at the beginning of this month that Microsoft (NASDAQ:MSFT) was discussing the possibility of making a sizeable investment in OpenAI.

An analyst from Wedbush Securities named Dan Ives said that Microsoft stock investment demonstrated the company’s aggressiveness in its attempt to win the artificial intelligence arms race.

In a research note, Ives stated, “In the AI race today, Nadella & Co. are ahead of the rest of Big Tech, and this investment is a huge notch on the AI belt,” He said this about Microsoft.

Ives noted that the investment was a break from Microsoft’s (NASDAQ:MSFT) philosophy under previous CEO Bill Gates during the U.S. government’s antitrust struggle during the 1990s when it scaled down its investing efforts. Gates was the company’s chairman and chief executive officer at the time.

Wedbush Securities has said that incorporating ChatGPT into Microsoft products might be a “possible game changer.”

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