It will boost the release of OpenAI’s latest AI chatbot Microsoft‘s (MSFT) position as a market leader in artificial intelligence, says a Wall Street analyst. Microsoft shares rose on Wednesday despite the broad market downturn.
Privately owned OpenAI released GPT-4 On Tuesday, one year after version 3.5. GPT stands for Generative Pre-Trained Compiler. It uses artificial intelligence to produce human-like responses to questions and commands. It also powers the noisy ChatGPT application.
Microsoft is a major investor in OpenAI and uses GPT-4 to power its Bing search engine and other applications. GPT-4 runs on Microsoft’s Azure cloud computing infrastructure.
Oppenheimer analyst Timothy Horan reaffirmed his outperform valuation of Microsoft stock after the GPT-4 news. It also kept the target price for Microsoft stock at 280.
Microsoft stock rises in artificial intelligence news
In stock market noon trading today, Microsoft stock was up 1.4%, at 264.48.
With GPT-4, Horan said in a note to clients, the technology is moving from the research phase to the commercial phase. It will increase demand for Azure and improve Microsoft’s position in artificial intelligence in general, he says.
However, Horan said Microsoft is still working on issues with GPT-4 in Bing. He said the responses are more accurate but much slower with the new AI engine.
In addition to Microsoft, other companies that use GPT-4 include Duolingo (DUOL) and Stripe and Morgan Stanley (Ms).
Follow Patrick Seitz on Twitter at @employee For more stories on consumer technologies, software and semiconductor stocks.
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