Microsoft-backed (MSFT) AI firm OpenAI has launched GPT-5, which is the newest version of the AI model behind ChatGPT. This release comes more than two years after GPT-4 was released in March 2023 and is being closely watched as a sign of whether generative AI is still advancing quickly or starting to slow down. Interestingly, earlier in the same week, OpenAI competitor Anthropic also released a new version of its Claude chatbot, which shows just how competitive the AI space is.
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Unsurprisingly, people have high expectations for GPT-5 because OpenAI has long said that its progress in AI is leading toward artificial general intelligence (AGI), a kind of AI that can outperform humans in valuable jobs. To reach this goal, OpenAI is trying to raise large amounts of money in order to cover the high cost of computing power and data centers that are needed to build and operate these advanced systems. As a result of these financial requirements, the company has had to change its structure. Indeed, it was originally founded in 2015 as a nonprofit that was focused on developing AGI safely.
However, OpenAI now operates a for-profit arm that may soon be valued at $500 billion, and the shift hasn’t come without controversy. For example, CEO Sam Altman was briefly removed by the nonprofit board in late 2023. Although he was quickly reinstated, the incident exposed the tensions within the company’s governance. In addition, OpenAI has since faced legal scrutiny from attorneys general in California and Delaware, as well as a lawsuit from Elon Musk, one of its original founders and funders. In response, OpenAI now plans to restructure its for-profit entity into a public benefit corporation.
Is MSFT Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 34 Buys and one Hold assigned in the last three months. In addition, the average MSFT price target of $624.17 per share implies 19.8% upside potential.
