In a remarkable turn of events, Microsoft’s stock soared to unprecedented heights on Monday, clinching a record close at $377.44, a noteworthy 2.1% surge.
The catalyst? The announcement of Sam Altman, former OpenAI CEO, taking the reins of Microsoft’s artificial intelligence innovation sector.
Reversal of Fortunes
This surge follows a 1.7% dip in Microsoft’s shares on Friday, coinciding with Altman’s abrupt departure from OpenAI due to a boardroom coup. Microsoft is the largest stakeholder in OpenAI, with a substantial $13 billion investment.
The strategic move to bring Altman on board indicates Microsoft’s commitment to consolidating its position in the rapidly evolving AI landscape.
The addition of Greg Brockman, a co-founder of OpenAI, further uplifts Microsoft’s ambitions in the artificial intelligence domain.
Analyst Insight
Tech analyst Dan Ives from Wedbush Securities remains bullish on Microsoft, reiterating a $425 price target for its stock following Altman and Brockman’s appointments.
Ives contends that Microsoft now stands in an even stronger position from an AI perspective, signaling confidence in the company’s strategic direction.
Wider Market Impact
The positive momentum isn’t confined to Microsoft alone. Other members of the “Magnificent Seven,” such as Nvidia, witnessed a 2.3% uptick in shares, reaching a record-high close at $504.20.
This surge anticipates Nvidia’s upcoming earnings report, underlining the broader market sentiment favoring companies at the forefront of AI innovation.
Ad Exodus Rocks X as Major Brands Pull the Plug
Influential brands suspended their advertising on X on Friday, significantly blowing Elon Musk’s social media venture.
The move followed Musk’s recent public endorsement of an antisemitic conspiracy theory, a stance aligned with White supremacists.
Global Giants Join the Revolt
Prominent names such as Disney, Paramount, NBCUniversal, Comcast, Lionsgate, and Warner Bros. Discovery, the parent company of CNN, supported the high-profile revolt.
Even tech giant Apple reportedly severed ties with X, as reported by various outlets, including Axios.
Backlash Against Musk’s Extremist Views
Major advertisers’ rapid and expansive withdrawal comes in the wake of a mounting backlash against Musk.
His increasingly vocal endorsement of extremist ideologies, compounded by the platform hosting ads alongside pro-Nazi content, has triggered a crisis for X.
Elon Musk and X CEO Linda Yaccarino had previously expressed confidence in the platform’s return to profitability, aiming for a turnaround as early as next year.
However, the mass protest of advertisers raises serious questions about the viability of this goal.
X Pushes Back Against Allegations
X accused progressive media watchdog group Media Matters of an aggressive campaign to find pro-Nazi content, alleging misrepresentation of the user experience. X defended its stance, emphasizing its “Freedom of Speech, not Reach” policy.
Media Matters President Angelo Carusone dismissed Musk’s posturing, emphasizing the accuracy of their reporting and Musk’s admission that the ads ran alongside objectionable content.
X announced that accounts identified in the Media Matters report would lose eligibility for monetisation, a measure to prevent ad placement on those pages.
Tech Turbulence: What Do You Think?
These developments reflect the interplay between corporate decisions and public perception in the tech industry. On the one hand, Microsoft’s strategic move to bring in Sam Altman and Greg Brockman signals a commitment to advance in the competitive AI landscape.
The positive market response and the endorsement from analysts like Dan Ives suggest a vote of confidence in Microsoft’s AI.
At X, formerly Twitter, is concerned. The mass withdrawal of major advertisers, including industry giants like Disney and Apple, paints a picture of a platform facing severe reputational challenges.
The tug-of-war between X and Media Matters adds a layer of complexity to the situation, leaving room for skepticism regarding X’s commitment to free speech and its ability to address content-related issues.
The tech industry is volatile, where success and downfall are not just on technological advancements but also on how companies navigate ethical concerns and public perception.
Anas Hasan
November 21, 2023
6 months ago
