Sam Altman’s sudden removal—and surprise return—as CEO of OpenAI was fed by a simmering tension around artificial intelligence: tying to turn the powerful science into a profitable and fast-growing business. While details of what happened at OpenAI remain unknown, a majority of its board members were uneasy with the company’s pace of innovation and Altman’s plans to build a more powerful business.
“OpenAI was deliberately structured to advance our mission: to ensure that artificial general intelligence benefits all humanity,” OpenAI’s board said in dismissing Altman. The resulting crisis, and near unanimous disapproval of the board’s decision, suggests that investors have fewer qualms about science versus profits.
Since OpenAI launched ChatGPT to the public in November 2022, tech stocks have soared, largely as investors priced in the transformative potential of AI. And they expect much more to come.
Microsoft
shares rallied to a record high after Altman’s dismissal
Microsoft isn’t waiting for AI to fix humanity. Its new Copilot service, launched last month, assists in creating documents, spreadsheets, presentations, and emails. Enterprise users will pay $30 a month on top of existing subscriptions to Microsoft’s 365 software. For office workers, at least, the AI debate has been simplified: Is it worth paying $360 a year to reduce the pain of email?
Last Week
Markets
Markets closed on Thanksgiving and early on Black Friday. Oil prices edged up as OPEC+ discussed more production cuts. Stocks dipped before
Nvidia
earnings, which warned on China sales, and Federal Reserve minutes, which showed no signs of easing. On the short week, the Dow industrials rose 1.27%; the S&P 500 edged up 1%; and the Nasdaq Composite was up 0.89%. Something to give thanks for: a four-day Gaza cease-fire and hostage exchange.
Companies
The board putsch against CEO Sam Altman at OpenAI collapsed after
Microsoft
swept in to hire him, employees prepared to follow him, and venture investors threatened to sue. By Wednesday, Altman was back as CEO under a new board led by former
Salesforce
CEO Bret Taylor. Binance CEO Changpeng Zhao pleaded guilty to violating anti-money-laundering rules, and has agreed to step down and pay a $50 million fine. Binance will pay over $4 billion but survive. Swedish unions began a strike against
Tesla.
Deals
Blackstone and Rialto Capital were front-runners to win a $17 billion pool of commercial loans, part of an FDIC auction of failed
Signature Bank
assets. Meanwhile, Related Fund Management and two nonprofits looked ready to win a pool of apartment loans…The Wall Street Journal reported that short seller Jim Chanos closed his three-decade-old short-selling hedge fund…Chip maker
Broadcom
will be able to close its $69 billion acquisition of VMware after China suddenly approved the deal.
Write to Robert Teitelman at [email protected]
Next Week
Monday 11/27
The Census Bureau reports new-home sales data. Sales of newly constructed single-family homes are expected to decline to a seasonally adjusted annual rate of 700,000 in October, from 759,000 in September.
Tuesday 11/28
S&P CoreLogic releases its Case-Shiller National Home Price Index for September. Consensus calls for a 4.2% year-over-year jump, compared with a 2.2% rise in August.
Thursday, 11/30
Salesforce announces third-quarter results after the close. Wall Street expects the company to report $2.06 in earnings per share on sales of $8.7 billion. Shares are up 70% this year.
The Bureau of Labor Statistics releases the core personal-consumption expenditures price index for October. This gauge excludes volatile food and energy prices and is the Federal Reserve’s preferred inflation measure. The index is forecast to rise 3.5% year over year, a decline from September’s 3.7% rise.
Ulta Beauty’s
quarterly results, due out after the market close, will offer investors a look at how much people are spending on discretionary items in this economy. Ulta was a Barron’s stock pick in February.
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