Microsoft Has Everything To Lose as OpenAI Pushes for A Split
It seems obvious that $MSFT has significant downside risk as OpenAI pulls away from its Microsoft partnership. MSFT’s rich valuation hangs on its AI hopes. Microsoft’s weak AI lineup would be exposed in OpenAI’s absence.
AI's front-office - OpenAI - is pulling away from AI's back-office - Microsoft. Guess which company generates all of the cool AI IP in the relationship? Not Nadella & Company.
Azure will feel the sting over the next number of years as OpenAI takes from Redmond and distributes a portion of MSFT’s cloud revenue to Oracle (ORCL), Google (GOOGL), and keeps some for itself.
Microsoft has little to speak of on the AI product side outside of its Azure service. OpenAI has contributed 100% of the AI substance and sizzle that has driven MSFT shares higher over the past several years.
