US technology company Microsoft is poised to strengthen its position in generative artificial intelligence as it hires Sam Altman, former chief executive of ChatGPT’s parent company OpenAI, to lead a new in-house AI team, industry analysts said.
The move will diversify Microsoft’s generative AI portfolio and reduce its reliance on a single company, OpenAI, a strategy that competitors such as Amazon Web Services are following, they said.
Microsoft chief executive and chairman Satya Nadella on Monday announced Mr Altman and former OpenAI president Greg Brockman are to join the Washington state-based company, following unsuccessful efforts to reinstate him as chief executive of OpenAI.
“We look forward to moving quickly to provide them [Mr Altman and Mr Brockman] with the resources needed for their success,” Mr Nadella wrote on X, formerly Twitter.
The decision ended speculation that Mr Altman might return to OpenAI after his turbulent ousting from the generative AI start-up last week.
“The move is certainly like Christmas coming early for them [Microsoft] and with a CEO [like Mr Altman], who built the company [OpenAI] from nothing to over a billion-dollar valuation, the future of Microsoft looks bright,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.
“Microsoft certainly needed a person like him and all of this will positively contribute to the company’s earnings and profile.”
Following the news, Microsoft’s stocks were trading 1.12 per cent higher at $369.85 a share in pre-market trading before surging to $376.27 at 12.09am New York time (9.08pm UAE time). The company’s market valuation stood at $2.80 trillion.
Mr Nadella “pulled a master move by hiring Sam/Greg as it further boosted the company’s in-house AI capabilities”, said Yang Wang, senior analyst at Counterpoint Research.
“Microsoft potentially gets a closer look ‘under the hood’, with the potential to not just develop cutting-edge AI models, but also vertically optimised AI models, infrastructure, networks and hardware. These will add tremendous economic value to Microsoft.”
Microsoft, the primary supporter of OpenAI with a reported commitment of $10 billion to bolster the company, has also affirmed its dedication to the California-based start-up.
However, sources revealed the tech giant was caught off guard by Mr Altman’s departure, receiving notification 10 minutes before OpenAI made the news public on Friday. In the meantime, OpenAI has appointed former Twitch chief executive Emmett Shear as its interim boss.
United Arab Emirates Dirham Exchange Rate
