- Microsoft’s share price increased by less than 2% on Monday before the opening of the session.
- The rebound came after Satya Nadella said former OpenAI CEO Sam Altman was joining the company.
- Microsoft will increase its market capitalization by almost $50 billion if gains hold until the closing bell.
Microsoft’s stock price rose in Monday’s premarket in response to investor reaction OpenAI CEO Sam Altman joining the Big Tech giant.
Shares were up less than 1.7% shortly before 6 a.m. EST, after rising as much as 2.6% earlier in the day. Microsoft’s total market capitalization will increase by $50 billion to $2.8 trillion if these gains hold through to the closing bell, Business Insider calculates.
Shares rose after Microsoft CEO Satya Nadella announced on Monday that the company had hired Altman, as well as former OpenAI CEO Greg Brockman.
“We are extremely excited to share the news that Sam Altman and Greg Brockman and their colleagues will be joining Microsoft to lead a new research team focused on advanced artificial intelligence,” Nadella said on the program X, formerly known as Twitter. “We look forward to moving quickly to ensure they have the resources they need to succeed.”
Altman re-shared Nadella’s postadding: “The mission continues.”
On Friday, Altman was fired from OpenAI in a shocking move, with developer ChatGPT’s board saying it no longer had “confidence in his ability to continue to lead.”
The board seemed to consider changing this decision over the weekend, with Altman sharing self-image on Sunday at OpenAI headquarters. Edge reported early Monday that discussions had fallen apart, and former Twitch CEO and co-founder Emmett Shear was subsequently named interim CEO.
According to analysts, Microsoft’s hiring of Altman will reassure shareholders who feared that he would start a new company and introduce a competitor to ChatGPT. Microsoft is the largest shareholder in OpenAI and has incorporated the intelligent language tool into its Bing search engine.
“Microsoft made the decision to protect their investment, and the decision to hire Altman helped minimize the risk of an OpenAI exodus while adding expertise to their massive AI operations,” said Joshua Mahony, principal analyst at Scope Markets.
Microsoft shares were up 54% year-to-date before Monday’s decision, helped by a huge surge in interest in artificial intelligence and investors piling into Big Tech’s “Magnificent Seven” stocks, which are seen as safer than smaller-cap companies in times of uncertainty.