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from24/7 Wall St.
7 hours agoMicrosoft Slips as OpenAI Bet Starts to Worry Investors
Microsoft stock is declining despite a Buy rating from Bank of America, highlighting investor anxiety amid concerns over its relationship with OpenAI.
"We see a really, really diverse set of tech," says Tori Westerhoff, principal AI security researcher on the Microsoft AI Red Team. "Part of the kind of magic of the team is that we can see anything from a product feature to a system to a copilot to a frontier model, and we get to see how tech is integrated across all of those, and how AI is growing and evolving."
The feature, called AI Restyle, allows users to apply a range of styles to photos in OneDrive. Microsoft has gone further by adding the ability to create a new version of a photo using either a preset or a prompt.
The software and cloud biz has now asked for the record to be changed after Hugh Milward, Microsoft senior director of corporate, external and Legal, told the House of Commons Business and Trade Committee that the ICC - "not Microsoft" - decided to turn off email services to Karim Khan, the ICC chief prosecutor sanctioned by US President Donald Trump.
The Damage Report Amazon closed at $199.60 on February 12th, down 13.5% year-to-date and 17.7% over the past month. The stock peaked at $258.60 within the last 52 weeks, meaning it has fallen roughly 23% from that high. The decline accelerated sharply in early February, with the stock's RSI dropping to 23.46, deep into oversold territory and the lowest reading since the 2022 bear market.
According to recent reports, the company is talking to publishers about launching a marketplace where media sites can sell their content directly to companies building AI tools. The idea is to create a central hub where media outlets can license articles, data, and other content to AI companies. At the moment, many AI models use information scraped from the web without clear agreements or compensation. This has sparked legal disputes and raised questions about ownership and how publishers should be fairly compensated.
Those cliches reflected the way the company's founders and long-time CEOs were depicted as well: Steve Jobs the rebel, Bill Gates the business drone. My, how times have changed. These days Apple CEO Tim Cook has become one of tech's Sycophants-in-Chief to US President Donald J. Trump, while Microsoft CEO Satya Nadella, in his own quiet way, has been the only tech exec to face the president down when necessary.
Emails between former Windows boss Steven Sinofsky and Jeffrey Epstein, published by the Justice department on Friday, appear to show that Sinofsky constantly sought Epstein's advice as he negotiated his surprise exit from Microsoft in November 2012, forwarding emails to him in nearly real time as talks progressed. Sinofsky also appears to have paid Epstein for his help at the end of the process, and turned to him for assistance finding a new job with Apple or Samsung, according to the emails.
Microsoft ( NASDAQ:MSFT) shares are fresh off a historic decline following the release of some poorly-received quarterly earnings results. Undoubtedly, at its worst, shares shed more than 12% of their value in the session that followed the big reveal. The big headline was that $357 billion in value was wiped out. That's the worst day for the enterprise software icon and AI innovator since the 2020 stock market crash.
The trigger was the Surface RT, Microsoft's first real attempt to muscle into Apple's hardware turf. By November 2012, Sinofsky was warning internally that it was going sideways fast. In an email to CEO Steve Ballmer and COO Kevin Turner, he said the device was "about to catastrophically fail in a very public way," with sales tracking at roughly one-tenth of even the lowest expectations.
Analysts use discounted cash flow models to value companies. These models rely heavily on future cash flows and a "terminal value" which is how much the business is worth beyond the forecast period. For big tech companies investing big money into AI, that terminal number can look great, because they stand to benefit from their investments in the technology longer term.
As Wall Street obsessed over Microsoft's Azure growth rates and OpenAI accounting, LinkedIn quietly crossed $5 billion in quarterly revenue for the first time in the Redmond company's December quarter, up 11%. That puts the business social network on an annual run rate of more than $20 billion. LinkedIn is known for its recruiting tools and job postings, but given overall weakness in the job market, the latest growth is being fueled by LinkedIn Marketing Solutions, its advertising business.
In 2020, Microsoft President Brad Smith announced that the company would reduce its water consumption and even become "water positive" by 2030. This means that Microsoft would replenish more water than it consumes. At the time, this goal seemed achievable, but the rapid rise of generative AI has completely changed the playing field. The construction of new data centers has accelerated, and with it the need for water for cooling.
Microsoft wasted little time last fall after reaching a deal to finalize its new relationship with OpenAI to find a new AI dance partner - Anthropic, the second most valuable AI startup in the world. Even though the relationship between Microsoft and Anthropic is only a few months old, it appears as if Microsoft sees a future with Anthropic that's at least as valuable as the one it had with OpenAI.
The agreement has been approved by the boards of directors of both Microsoft and Skype, said Microsoft. "The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities," the company said. "The combination will extend Skype's world-class brand and the reach of its networked platform, while enhancing Microsoft's existing portfolio of real-time communications products and services."
There have been rumors about Microsoft working on a free, ad-supported tier for its Xbox Cloud Gaming service, and now we have solid proof coming straight from Microsoft. Some users report that they've spotted a new message saying "1 hour of ad-supported playtime per session," although there's no such tier just yet. It's a clear sign that the company is preparing a free tier, confirming earlier rumors.
Microsoft wants whoever gets the gigs to "Lead and implement datacenter power interconnection projects, power purchase agreement and/or energy supply contract development with utilities and third-party energy suppliers in support of Microsoft's DC businesses in APAC and associated objectives related to capacity delivery, cost and sustainability."