Microsoft (MSFT) shares have been rising despite the drama at AI-partner OpenAI. Microsoft had initially announced that OpenAI Co-Founder Sam Altman would be joining the company after his firing from the startup. Now that Altman has been rehired by the AI company, Microsoft CEO Satya Nadella says he is "encouraged" at what's happening at OpenAI and that the board changes are the "first essential step on a path to more stable, well-informed, and effective governance."

Piper Sandler Analyst Brent Bracelin says establishing OpenAI's governance post the leadership shakeup is now imperative. Bracelin notes that there is "a little bit of risk here surface around the reliance around OpenAI and the structure there." He argues Microsoft rightly lent Altman support, though the episode exposed Microsoft's lack of control in the company despite being a major shareholder. Ultimately though, Bracelin think this was likely "one of the better outcomes," especially if Microsoft gets a board seat out of it.

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Video Transcript

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RACHELLE AKUFFO: Boardroom chaos at OpenAI has highlighted the cracks in its corporate structure. But what about Microsoft? Even though Sam Altman is back at OpenAI, the tech giant might still be the winner. Shares of Microsoft spiked during the upheaval at OpenAI.

Now, prior to Altman's return to OpenAI, Microsoft inviting the nonprofit's employees onto the Microsoft AI lab team. So is Microsoft on its way to dominating the AI industry? For more on this, Brent Bracelin, Piper Sandler analyst is here to tell us more.

So talk about the strategy here. We saw Satya Nadella voicing his support for Sam going back to OpenAI and continuing to support there. What is the strategy there as to how Microsoft still comes out on top?

BRENT BRACELIN: Sure. Well, listen, it's been a very busy month with several new product launches, several user events where Microsoft is getting buy in for their first mover advantage in AI with really large enterprises. Accenture going wall to wall with GitHub Copilot powered by OpenAI and GPT4. Large enterprises like [? Bear ?] and Shopify that are building their AI interfaces and functionality using Microsoft technology and OpenAI.

So it is very critical as you think about Microsoft and this OpenAI relationship that they have a much better understanding of governance, and controls, and the opportunity. Things are happening very fast. There's a lot of excitement. Microsoft has this first mover advantage, but we've seen a little bit of risk here surface around the reliance around OpenAI and the structure there.