Microsoft stocks rally 2% with surprise addition of ex-OpenAI CEO Sam Altman to the fold

In the wake of the unexpected upheaval at OpenAI, Microsoft emerges as the major beneficiary, securing ousted CEO Sam Altman and other key personnel to prevent a potential exodus to competitors and fortify its leadership in the artificial intelligence (AI) arena.

Concerns about the fallout for Microsoft, a significant investor in OpenAI whose technology powers most of its AI offerings, prompted the strategic move to retain key figures from the startup. This maneuver safeguards Microsoft's position in the competitive AI landscape against rivals like Google, as it strives to dominate the burgeoning industry.

Microsoft's stock experienced a notable uptick, surging up to 2 percent to achieve a record high, with the company poised to add nearly $30 billion to its market value. The hiring of Sam Altman, along with OpenAI co-founder Greg Brockman and other researchers, including Szymon Sidor, underscores Microsoft's ability to transform a crisis into an opportunity.

Approximately 500 employees of OpenAI, expressing dissatisfaction with the board's actions, threatened to depart unless Altman and Brockman were reinstated. Microsoft responded by assuring these employees of positions within its new subsidiary, should they choose to join.

Analysts predict that Microsoft's move not only averts an anticipated employee exodus due to governance concerns but also positions the company to take control of crucial AI development paths. The Altman-led team at Microsoft is expected to benefit from increased access to computing power, given Microsoft's status as the second-largest U.S. cloud player and its substantial investment in expanding datacenter capacity.

The strategic hiring of Altman and his team is seen as a turning point, allowing Microsoft to maintain its influence in the rapidly evolving AI landscape and potentially reshape the future of artificial intelligence development.