Microsoft’s Stock Hits Record High After Hiring OpenAI Outcasts (2024)

Microsoft, the technology giant that ranks as one of the world’s most valuable companies, was shaken by the upheaval at OpenAI, the small but influential artificial intelligence start-up that developed the ChatGPT chatbot, before it found a way out of the turmoil that propelled its shares to a new high.

The unexpected ouster on Friday of Sam Altman, OpenAI’s co-founder and chief executive, set off a chain of events that erased tens of billions from Microsoft’s market value, a sign of how important OpenAI is to the tech behemoth. Microsoft has invested more than $13 billion in OpenAI, and Apple, Google and Meta have rushed to catch up with their own A.I. offerings.

Microsoft’s stock has been on a roller coaster since Mr. Altman’s departure from OpenAI, dropping on Friday and continuing to slide in after-hours trading. Over the weekend, the company led an effort to try to convince OpenAI’s board to reinstate Mr. Altman, a charismatic, well-connected founder in Silicon Valley.

In the end, Microsoft said late on Sunday that it would hire Mr. Altman and Greg Brockman, OpenAI’s president and a company co-founder who quit in solidarity with Mr. Altman. The two men will lead an advanced research lab at Microsoft, “setting a new pace for innovation,” said Satya Nadella, Microsoft’s chief executive.

On Monday, Microsoft’s stock recovered the ground it had lost, and then some: It rose more than 2 percent to a record high, as analysts praised the company for hiring the OpenAI outcasts.

The rally extended past Microsoft, with other A.I.-related companies, including the chip-makers Nvidia and Broadcom, reaching new highs as well. The tech-heavy Nasdaq index was up 1.13 percent at the close on Monday.