- Microsoft’s stock price climbed just under 2% in premarket trading Monday.
- The bounce came after Satya Nadella said that former OpenAI CEO Sam Altman is joining the company.
- Microsoft will add nearly $50 billion to its market capitalization if the gains hold until the closing bell.
Microsoft’s stock price climbed higher in Monday’s premarket, as investors reacted to former OpenAI CEO Sam Altman joining the Big Tech giant.
Shares were up just under 1.7% shortly before 6 a.m. Eastern Time, having climbed as much as 2.6% earlier in the day. Microsoft’s total market capitalization will rise by $50 billion to $2.8 trillion if those gains hold up until the closing bell, by Business Insider’s calculations.
The stock jumped after Microsoft CEO Satya Nadella announced Monday that the company had hired Altman, as well as former OpenAI president Greg Brockman.
“We’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team,” Nadella said on X, formerly known as Twitter. “We look forward to moving quickly to provide them with the resources needed for their success.”
Altman reshared Nadella’s post, adding, “The mission continues.”
Altman was ousted from OpenAI in a shock move Friday, with the ChatGPT developer’s board saying it no longer had “confidence in his ability to continue leading”.
The board appeared to consider reversing that decision at the weekend, with Altman sharing a picture of himself at OpenAI’s HQ Sunday. The Verge reported early Monday that discussions had fallen apart, with former Twitch CEO and cofounder Emmett Shear subsequently named interim CEO.
Microsoft’s hiring of Altman will reassure shareholders who were worried he would start a new company and launch a competitor to ChatGPT, according to analysts. Microsoft is OpenAI’s largest shareholder and has incorporated the intelligent language tool into its search engine, Bing.
“Microsoft have moved to secure their investment, with the decision to hire Altman helping minimise the chance of an OpenAI exodus, whilst also adding expertise for their massive AI operation,” Scope Markets’ chief analyst Joshua Mahony said.
Microsoft shares were up 54% year-to-date before Monday’s move, powered higher by the massive surge in interest in AI and investors piling cash into the “Magnificent Seven” Big Tech stocks, which are seen as safer bets than smaller-cap companies in times of uncertainty.