The release of the latest version of OpenAI's artificial intelligence-powered chatbot will bolster Microsoft's position as a leader in the AI market, a Wall Street analyst says. Microsoft stock rose Wednesday despite a rough day for stocks.
Privately held OpenAI released GPT-4 on Tuesday, one year after version 3.5. GPT is short for generative pre-trained translator. It uses artificial intelligence to produce humanlike responses to questions and commands. It also powers the buzzy application ChatGPT.
Microsoft is a major investor in OpenAI and is using GPT-4 to power its Bing search engine and other applications. GPT-4 runs on Microsoft's Azure cloud computing infrastructure.
Oppenheimer analyst Timothy Horan reiterated his outperform rating on Microsoft stock after the GPT-4 news. He also kept his price target on Microsoft stock at 280.
Microsoft Stock Rises On AI News
On the stock market today, Microsoft stock climbed 1.8% to close at 265.44.
With GPT-4, the technology is moving from research to commercial phase, Horan said in a note to clients. It will increase demand for Azure and improve Microsoft's positioning in AI in general, he says.
However, Microsoft is still working out the kinks with GPT-4 in Bing, Horan said. Responses are more accurate but much slower with the new AI engine, he said.
In addition to Microsoft, other companies using GPT-4 include Duolingo, Stripe and Morgan Stanley.
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