Microsoft CEO Satya Nadella speaks at the company’s Build developer conference in Seattle, May 23, 2023.
Microsoft
Microsoft shares climbed to a record Thursday after analysts at JPMorgan Chase touted the software maker’s growth prospects in artificial intelligence.
The stock rose 3.2% to close at $348.10, topping its prior all-time high reached in November 2021, the same month the Nasdaq peaked. U.S. indexes enjoyed a broad rally, following the Federal Reserve’s announcement Wednesday that it would hold off on increasing interest rates.
AI has been a hot topic all year, after Microsoft-backed OpenAI in November released the ChatGPT chatbot, which quickly went viral. Tech companies have rushed to embed the technology into products and features and have boasted their ability to use AI to drive cost savings as recession concerns persist.
Microsoft is a major beneficiary of the rise of ChatGPT and tangential products. On top of its hefty investment in OpenAI, the company provides the underlying computing power. Microsoft also has an exclusive license on OpenAI’s models, including the GPT-4 large language model that can spit out natural-sounding words in response to a human’s text input.
Microsoft has incorporated OpenAI tools into its Bing search engine and even the Windows operating system. At the company’s event in February to announce its Bing Chatbot, Microsoft CEO Satya Nadella said “it’s an exciting time in tech.”
Investors want to see what it all means for Microsoft’s earnings and revenue.
In April, Microsoft finance chief Amy Hood said she expects fiscal fourth-quarter growth for Azure cloud of 26% to 27% year over year in constant currency, with 1 percentage point of it coming from AI services. On Monday, in a public discussion with Microsoft technology chief Kevin Scott, Hood provided more specifics, saying that “the next generation AI business will be the fastest-growing $10 billion business in our history.”
In the past four quarters, Microsoft has generated almost $208 billion in total revenue.
Scott went deeper on Hood’s prediction.
“Because it really is a very general platform, we have lots of different ways that $10 billion of ARR is going to first show up,” he said. ARR stands for annual recurring revenue.
“There is all of the people who want to come use our infrastructure, whether they’re training their own models, whether they are running an open-source model they’ve got or whether they are making API calls into one of the big frontier models that we’ve built with OpenAI,” Scott said.
Following the event, JPMorgan analysts lifted their price target to $350 from $315.
“While MSFT continues to encounter a broad wave of cloud optimizations weighing on Azure growth, we see it planting the longer-term seeds for success across Security, Teams, Power Apps and now the forward-looking OpenAI/ChatGPT investments,” wrote the analysts, who have the equivalent of a buy rating on Microsoft stock.
With Microsoft’s 46% rally this year, the stock has recouped all its losses from 2022, when investors rotated out of technology in anticipation of rising interest rates and economic headwinds.
Negative sentiment around cloud growth and a contracting PC market led to pessimism on Wall Street last year. But the excitement around AI in addition to the cost-cutting measures that tech companies implemented produced a renewed bullishness. The Nasdaq is up 32% this year, doubling the gains in the S&P 500.
Nvidia CEO Jensen Huang attends a roundtable discussion at the Viva Technology conference dedicated to innovation and startups at Porte de Versailles exhibition center in Paris on June 11, 2025.
Sarah Meyssonnier | Reuters
Nvidia announced Tuesday that it hopes to resume sales of its H20 general processing units to clients in China, saying that the U.S. government had assured the company would be granted licenses.
Nvidia’s sales of the H20 chips, which had been designed specifically to keep them out of export controls on China, were halted in April.
“The U.S. government has assured NVIDIA that licenses will be granted, and NVIDIA hopes to start deliveries soon,” the company said in a statement.
This comes against the backdrop of a preliminary trade deal between Washington and Beijing last month that sought China to resume rare earth exports and the U.S. to relax tech export controls.
Nvidia CEO Jensen Huang in recent months has ramped up his lobbying against export controls, arguing that they inhibited American tech leadership. In May, Huang said chip restrictions had already cut Nvidia’s China market share nearly in half.
Huang also announced a new “fully compliant” GPU, NVIDIA RTX PRO, saying it was ideal for smart factories and logistics.
The potential change in U.S. stance follows a meeting between Huang and U.S. President Donald Trump last week.
In his meeting with Trump and U.S. policymakers, Huang had reaffirmed Nvidia’s support for the administration’s job creation and onshoring efforts, as well as the aim for America to lead in global AI, the company said.
Meanwhile, in Beijing, it was confirmed that Huang has met with government and industry officials to discuss the benefits of AI and ways for researchers to advance safe and secure AI for the benefit of all.
In this photo illustration, a man seen holding a smartphone with the logo of US artificial intelligence company Cognition AI Inc. in front of website.
Timon Schneider | SOPA Images | Sipa USA | AP
Artificial intelligence startup Cognition announced it’s acquiring Windsurf, the AI coding company that lost its CEO and several other senior employees to Google just days earlier.
Cognition said on Monday that it will purchase Windsurf’s intellectual property, product, trademark, brand and talent, but didn’t disclose terms of the deal. It’s the latest development in an AI talent war, as companies like Meta, Google and OpenAI fiercely compete for top engineers and researchers.
OpenAI had been in talks to acquire Windsurf for about $3 billion in April, but the deal fell apart, and Google said on Friday that it hired Windsurf’s co-founder and CEO Varun Mohan. Google is paying $2.4 billion in licensing fees and for compensation, as CNBC previously reported.
“Every new employee of Cognition will be treated the same way as existing employees: with transparency, fairness, and deep respect for their abilities and value,” Cognition CEO Scott Wu wrote in a memo to employees on Monday. “After today, our efforts will be as a united and aligned team. There’s only one boat and we’re all in it together.”
Cognition didn’t immediately respond to CNBC’s request for comment. Windsurf directed CNBC to Cognition.
Cognition is best known for its AI coding agent named Devin, which is designed to help engineers build software faster. As of March, the startup had raised hundreds of millions of dollars at a valuation of close to $4 billion, according to a report from Bloomberg.
Both companies are backed by Peter Thiel’s Founders Fund. Other investors in Windsurf include Greenoaks, Kleiner Perkins and General Catalyst.
“I’m overwhelmed with excitement and optimism, but most of all, gratitude,” Jeff Wang, the interim CEO of Windsurf, wrote in a post on X on Monday. “Trying times reveal character, and I couldn’t be prouder of how every single person at Windsurf showed up these last three days for each other and for our users.”
Wu said that the acquisition ensures all Windsurf employees are “treated with respect and well taken care of in this transaction.” All employees will participate financially in the deal, have vesting cliffs waived for their work to date and receive fully accelerated vesting for their, according to the memo.
“There’s never been a more exciting time to build,” Wu wrote.
The Grok logo is being displayed on a smartphone with Xai visible in the background in this photo illustration on April 1, 2024.
Jonathan Raa | Nurphoto | Getty Images
The European Union on Monday called in representatives from Elon Musk‘s xAI after the company’s social network X, and chatbot Grok, generated and spread anti-semitic hate speech, including praise for Adolf Hitler, last week.
A spokesperson for the European Commission told CNBC via e-mail that a technical meeting will take place on Tuesday.
xAI did not immediately respond to a request for comment.
Sandro Gozi, a member of Italy’s parliament and member of the Renew Europe group, last week urged the Commission to hold a formal inquiry.
“The case raises serious concerns about compliance with the Digital Services Act (DSA) as well as the governance of generative AI in the Union’s digital space,” Gozi wrote.
X was already under a Commission probe for possible violations of the DSA.
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Grok also generated and spread offensive posts about political leaders in Poland and Turkey, including Polish Prime Minister Donald Tusk and Turkish President Recep Erdogan.
Over the weekend, xAI posted a statement apologizing for the hateful content.
“First off, we deeply apologize for the horrific behavior that many experienced. … After careful investigation, we discovered the root cause was an update to a code path upstream of the @grok bot,” the company said in the statement.
Musk and his xAI team launched a new version of Grok Wednesday night amid the backlash. Musk called it “the smartest AI in the world.”
xAI works with other businesses run and largely owned by Musk, including Tesla, the publicly traded automaker, and SpaceX, the U.S. aerospace and defense contractor.
Despite Grok’s recent outburst of hate speech, the U.S. Department of Defense awarded xAI a $200 million contract to develop AI. Anthropic, Google and OpenAI also received AI contracts.