Does the recent OpenAI shakeup put MSFT's AI trajectory at risk and give GOOG an advantage?
Portfolio: Highlights, trends and comparative performance findings from recent earnings reports
Last weekend, news broke that Sam Altman, CEO and cofounder of OpenAI, was fired by the board. His exit was a total shocking surprise to everyone, including Microsoft, who has invested more than $10B in and owns a 49% share of the company. Sam’s departure was quickly followed by the resignations of several OpenAI technology leaders and AI researchers. OpenAI investors tried to bring Sam back, however were not successful. The last we heard was that MSFT hired Altman as their new AI chief. By the time this post is published, there might be further developments in the ongoing drama.
Beyond the chaos, as an AI investor, I am more interested in where we should invest going forward. I am more interested in the business and product implications of these changes:
MSFT has designed all their AI products on OpenAI’s ChatGPT. Is the future development roadmap of ChatGPT and by extension, MSFT’s AI trajectory in jeopardy?
Will Altman’s non-compete contract with OpenAI prevent him from working on AI as an MSFT employee?
Which large company now becomes OpenAI’s premium partner? GOOG? META? NVDA? TSLA? An old-world large cap looking to revitalize their growth like CSCO or IBM? Maybe MSFT sticks around for a while longer.
Will interest in MSFT’s AI offerings wane? …now that the underlying OpenAI product roadmap is at risk?
Does this evolving situation give GOOG an advantage?
Both MSFT and GOOG have reported their Q3 earnings. Subsequently, GOOG’s stock dropped about -9% while MSFT’s rose about 3%. Wall Street deemed that the latter reported better business results than the former. We took a closer look at GOOG’s report here.
Today, we will dive into MSFT’s Q3 earnings report and we will then compare the two companies to decide who might give shareholders better returns going forward…