OpenAI’s Future IPO Keeps Me Buying Microsoft
Article excerpt
Microsoft holds a stake in OpenAI that no public market has ever priced, and one investor argues that gap between the stock and the business is exactly where the opportunity lives. This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them. I keep buying Microsoft ( NASDAQ:MSFT | MSFT Price Prediction ), and every quarter gives me another reason to add more. The reason I bring up most at dinner is OpenAI. Microsoft owns roughly 27% of the company behind ChatGPT. That stake was valued at approximately $135 billion when the partnership was restructured. One day the stake will get a public price, and I want my shares in place before then. OpenAI is reportedly aiming a valuation of about $1.2 trillion, and its listing now points toward 2027. If OpenAI lists near that figure, a 27% stake would be worth about $324 billion on paper before dilution. That equals roughly 8.5% of Microsoft’s $3.81 trillion market cap. Right now that value shows up mostly as an accounting line. A public market would price it every trading day. I could wait and buy OpenAI directly at its IPO. I’d rather own it through Microsoft. Microsoft keeps IP rights to OpenAI models through 2032, including post-AGI models. OpenAI also signed to buy an additional $250 billion of Azure services. An OpenAI shareholder owns one model...
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Management expects fiscal 2027 capex of about $175 billion.
