Microsoft Market Cap Surges by $400 Billion After News About OpenAI Investment


Since Microsoft revealed that it will invest $10 billion into OpenAI, the maker of AI-based ChatGPT, the company’s market cap skyrocketed by $400 billion.

In just 3 months, Microsoft’s stock managed to provide its investors with 40x returns.

Microsoft ventures into AI

Back in January, Microsoft shared its intent to make a substantial investment of $10 billion in OpenAI, the startup responsible for the popular artificial intelligence tool ChatGPT.

The investment forms part of a funding round involving other investors and is expected to value OpenAI at an impressive $29 billion. Sources familiar with the matter revealed that the deal is slated for completion by the end of 2023, as indicated by term sheets sent to potential investors.

Microsoft’s investment in ChatGPT could bolster its web search endeavors, as Google currently dominates the market. While Microsoft’s Bing browser holds only a small share of the global search engine market, the deal with OpenAI is expected to enhance Microsoft’s search capabilities and allow it to challenge Google’s dominance.

At the time of writing, Microsoft (MSFT) is trading at $308 after a 6,65% surge in the past 30 days. The current market cap of the company is around $2.29 trillion.

About ChatGPT

The tech community has been abuzz with excitement about ChatGPT for several weeks. This tool, which operates as a natural language processing model, is designed to generate text that closely resembles human writing.

ChatGPT, a member of the GPT-3 family of large language models, has found applications ranging from code development to essay writing.

In a report released in December, Morgan Stanley explored whether ChatGPT poses a threat to Google. Brian Nowak, the lead analyst on Alphabet at the bank, suggested that language models could gain market share and potentially disrupt Google’s position as the primary entry point to the Internet.

OpenAI, established by entrepreneur Sam Altman in 2015, launched ChatGPT to the public in late November. Within five days of its release, ChatGPT attracted over 1 million users, as announced by Altman. Despite high optimism for its potential, the project has been experiencing significant expenses due to the overwhelming demand on its servers following its viral popularity.

Artificial intelligence as a threat to society

Geoffrey Hinton, an AI pioneer, expressed concerns about the threat of artificial intelligence (AI) surpassing even climate change. Hinton emphasized the need to address AI risks independently of his former employer, Alphabet.

While acknowledging the importance of climate change, Hinton believes that the potential consequences of advanced AI require immediate attention. He noted the complexity of addressing AI risks compared to reducing carbon emissions.

Hinton stressed the importance of collaboration between tech leaders and policymakers to effectively handle the implications of AI.