Just five days after he was fired as chief executive at artificial intelligence firm OpenAI, Sam Altman is back in charge of the buzzy AI startup. The news removes an overhang on Microsoft stock, analysts say.
Altman announced early Wednesday that he is returning to run OpenAI. That comes after he had agreed on Sunday to join Microsoft, an OpenAI investor, to form a new research organization.
The drama at OpenAI, creator of the ChatGPT text generator, began Friday when its board fired Altman, citing a lack of confidence in his ability to lead. In response, OpenAI President Greg Brockman and numerous employees quit or threatened to quit.
Now the board that fired Altman has been replaced. The new board members include Bret Taylor, a former Salesforce executive, and Larry Summers, former U.S. Treasury Secretary. They join sole remaining board member, Adam D'Angelo, chief executive of Quora.
OpenAI and Altman announced their latest moves in posts on X, formerly Twitter.
Microsoft Stock Rises On OpenAI News
On the stock market today, Microsoft stock rose 1.3% to close at 377.85.
Microsoft reportedly owns 49% of OpenAI after investing more than $13 billion in the venture.
"For Microsoft, this all ends up like a Cinderella ending as OpenAI will be stronger from an innovation and governance perspective," Wedbush Securities analyst Daniel Ives said in a client note. He called the "failed coup" by the prior board at OpenAI "a circus show."
Microsoft had always preferred the original structure of its deal with OpenAI rather than have to create its own AI research arm.
Ives reiterated his outperform rating on Microsoft stock with a price target of 425.
Jefferies analyst Brent Thill said Altman returning to OpenAI with a new board in place is "one of the best possible outcomes" for Microsoft.
The upheaval at OpenAI likely will have "limited impact" on Microsoft, Thill said in a client note. He reiterated his buy rating on Microsoft stock with a price target of 400.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
