Microsoft-backed AI firm OpenAI (MSFT) has released two new open-weight AI reasoning models, gpt-oss-120b and gpt-oss-20b, which it says are on par with its o-series models in many tests. Interestingly, both models are free to download on Hugging Face, with the 120b model designed to run on a single Nvidia (NVDA) GPU, while the 20b model is light enough to run on a regular laptop with 16GB of memory. This is OpenAI’s first open model release since GPT-2 over five years ago and comes as the company looks to attract developers.
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It is worth noting that these models perform well against other open AI systems and outperform competitors like DeepSeek and Qwen in coding and reasoning benchmarks. However, they still fall short of OpenAI’s closed models, such as o3 and o4-mini, especially in terms of accuracy. Indeed, testing shows that the open models have higher hallucination rates (nearly half of responses can be inaccurate) compared to 16% for the o1 model. Unsurprisingly, OpenAI says that this is normal for smaller models because they have less built-in knowledge.
Nevertheless, it still views them as useful for tasks like reasoning and coding because the training process for these models is similar to OpenAI’s closed models, which use a mixture-of-experts architecture and reinforcement learning to improve performance and efficiency. In addition, while they are text-only models, they can still connect to external tools like web search or Python for complex reasoning tasks. This launch comes as competition in the AI market intensifies, with new models expected soon from DeepSeek and Meta (META).
Is MSFT Stock a Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 33 Buys and two Holds assigned in the last three months. Furthermore, the average MSFT price target of $617.58 per share implies 17.8% upside potential.
