In a move that shocked the tech industry, Microsoft (NASDAQ:MSFT) appointed former OpenAI CEO Sam Altman to head up a new AI division. Altman is a well-respected figure in the AI community, having co-founded OpenAI and served as its CEO until his recent and surprising ousting. Greg Brockman, OpenAI co-founder, is also joining Microsoft.
Here's how Wall Street analysts have reacted:
Wells Fargo analysts titled their note "Chess, Not Checkers." The analysts, who have an Overweight rating and $425 price target on MSFT, said they ultimately believe "MSFT is now unquestionably better positioned exiting the shakeup, now with tighter control of the best tech + talent in AI."
Morgan Stanley analysts, who have an Overweight rating and $415 price target on MSFT, stated: "While the leadership tumult at OpenAI may create an opportunity for competitors to close the gap to the market-leading GPT model, near-term financial impacts appear limited and Microsoft looks to be taking swift action to mitigate the risks. That said, the situation continues to be fluid."
BofA believes hiring Altman is a "win-win for Microsoft." Analysts believe the move will likely draw other top AI talent to MSFT.
"This is a win-win for Microsoft," said the analysts. "First, the leading AI visionaries behind OpenAI will be running Microsoft's internal AI development efforts. The AI/analytics technical community is a small one and Mr. Altman's and Mr. Brockman's hiring is likely to bring gravity of other AI talent to Microsoft. This could accelerate the development of Microsoft's own AI offerings, such as the Azure AI library."