Microsoft Stock (NASDAQ:MSFT)
According to recent reports, Microsoft (NASDAQ:MSFT) is in discussions to make a sizeable investment in OpenAI. This company owns ChatGPT and is reportedly debating whether to incorporate innovative technology into its offerings, such as its Bing search engine and other products.
Wedbush Securities, an investment company, said on Wednesday that such an attempt by Microsoft (MSFT) would be considered a “wise, strategic move” from the computer giant and one that might be a “possible game changer.”
Analyst Dan Ives, who has an outperformed recommendation on Microsoft stock, stated that strengthening the relationships between Microsoft and OpenAI might benefit the firm financially under Satya Nadella and increase the company’s technical capabilities.
According to a note that Ives sent to clients, “While investing significant capital in the OpenAI platform to incorporate new features into existing Microsoft programs, Microsoft is set to work alongside OpenAI to create a game-changing technology that will be fully integrated into MSFT over the next decade.”
“While ChatGPT is naturally a high cash burn scenario today, we regard this as a strategic move for Nadella & Company to double down on its artificial intelligence strategy,” Ives noted. “This is a smart step because we view this as a situation where more use cases are boosting an unprecedented demand for AI solutions with additional use cases developing.”
Earlier sources suggest that Microsoft (MSFT) might put $10 billion into OpenAI at a value of $29 billion and then get 75% of the company’s income until its investment is recouped. This would bring Microsoft’s total investment in OpenAI to $49 billion. It would then retain 49% of OpenAI, with other investors owning the other 49%. Its nonprofit parent company would keep the remaining 2% of its shares.
“With ChatGPT being one of the most innovative AI technologies seen in the market, it is apparent that Microsoft is being aggressive on this front and is not going to be left behind on what could be a potentially game-changing AI investment,” Ives said further.
One of the top software options from Morgan Stanley was Microsoft stock; that announcement came one month ago.
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