OpenAI is currently in the midst of a dramatic situation, marked by the firing of its CEO, Sam Altman, and a potential mass departure of more than 730 employees threatening to quit unless the board steps down. While the internal turmoil at OpenAI might seem chaotic, Microsoft, the company's largest investor with a $10 billion stake, appears satisfied with the developments. Let’s find out why.
The landscape of artificial intelligence experiences another significant shift in power, catching the tech industry off guard. After the removal of OpenAI's co-founder and CEO in a tumultuous boardroom coup, Microsoft has enlisted Sam Altman to enhance its artificial intelligence innovation. Greg Brockman, another OpenAI co-founder, has also joined Microsoft. Following this news, Microsoft stock surged 2% on Monday, reaching an all-time high of $377 per share.
The exact reasons behind the loss of confidence in Altman remain unclear, with rumors suggesting concerns about his side projects and the perceived rush in expanding OpenAI's commercial offerings without sufficient consideration for safety implications. Despite attempts by investors to reinstate Altman, the board remains unwavering in its decision.
Microsoft appears poised to benefit from the chaos, potentially acquiring significant AI talent. However, the turmoil at OpenAI, a key contributor to Microsoft's AI technology through a partnership, may also impact Microsoft's AI products heavily reliant on OpenAI's tech.
The potential exodus from OpenAI raises uncertainties about the lab's future, drastically altering the fate of a once-prominent Silicon Valley startup valued at nearly $90 billion. The possible demise of OpenAI could create a void in the AI industry, compelling thousands of startups to seek alternative AI technology providers or face the possibility of closure. This situation may also empower major tech companies to consolidate control over emerging AI technology.
On the topic of industry giants, the most significant news during this week's earnings season is imminent. Nvidia is scheduled to report quarterly earnings on Nov. 21 after the bell, and there is a high likelihood of favorable results.
Analysts anticipate the company's total revenue to surge by 172% to $16.2 billion, with data center segment revenue nearly quadrupling to $13.02 billion from $3.83 billion a year earlier. On Wall Street, Nvidia's adjusted earnings are expected to rise to $3.37 from $0.58 in the same quarter last year. These optimistic projections stem from the company's dominant position in generative artificial intelligence.
In essence, rise in Nvidia stock may positively impact the shares of other semiconductor, AI, and related companies.
