The notable firing and reappointment of OpenAI CEO Sam Altman has resulted in a significant surge in potential investors for the AI software enterprise that powers ChatGPT. Google (NASDAQ:) searches for “OpenAI stock” increased by 1,200% compared to a 90-day high on November 18, the day after Altman’s firing became public, according to an analysis by Venture Smarter. Search volume increased by 354% on November 20th compared to the previous seven days following news of a staff uprising.
This surge in investor interest in OpenAI shares comes with both positive and negative news.
First, the unfavorable information. Since OpenAI is a privately held firm, its stock cannot be exchanged for cash on a stock exchange. Currently, stock from present shareholders of private companies can only be purchased by accredited investors when it is listed on private stock markets such as Forge. According to the Wall Street Journal, OpenAI was looking to sell shares for employees at a valuation of $80-$90 billion in late September, before the Altman commotion. Given the ongoing dispute, it is unclear where the share sale stands at the moment.
Let’s move on to the positive announcement. Microsoft (NASDAQ:) is now the greatest option for those who are unable to purchase OpenAI shares. Microsoft made a $10 billion investment in OpenAI in January 2023, at a valuation of $29 billion. With a 49% part now owned by them, their investment might possibly triple in value. In reality, Microsoft intended to recruit Altman to carry out his AI work even after he was fired by OpenAI. Microsoft is in favor of Altman returning to OpenAI under a new board structure, proving that cooler heads have prevailed. According to Venture Smarter, investor interest in Microsoft’s stock also skyrocketed. Searches for “Buy Microsoft stock” and “MSFT” increased by 371% and 526%, respectively, on the day Altman was sacked. In fact, Microsoft hit a new all-time intra-day and closing high on Wednesday, just before the Thanksgiving holiday.
Microsoft stands to gain the most from generative AI, according to Mizuho analysts, and they would expect the company’s cooperation with OpenAI to stay robust regardless of whether Altman reports directly to CEO Satya Nadella.
Although some change (to MSFT’s advantage) is possible, we aren’t expecting any big changes for MSFT’s governance or rights. Above all, we strongly anticipate that Microsoft and OpenAI will continue to have a robust cooperation,” the analysts said.
“More broadly, notwithstanding a more difficult operating environment, we remain confident that MSFT’s growth opportunities over the medium-term and beyond are greater than many realize, and this includes significant Generative AI monetization,” the analysts stated. Microsoft’s stock is rated as a Buy by them, with a $420 price target and a Top Pick classification.
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