Wall Street reacts to Microsoft and OpenAI's new deal

(Reuters) -Microsoft and OpenAI on Tuesday said they had reached a deal to allow the ChatGPT maker to restructure itself into a public benefit corporation, valuing OpenAI at $500 billion and clearing the way for it to become a publicly traded company.

The Windows maker would hold a stake of about $135 billion - or 27% - in OpenAI Group PBC, which will be controlled by the OpenAI Foundation, a nonprofit.

Here are reactions from analysts and investors:

GIL LURIA, HEAD OF TECHNOLOGY RESEARCH AT DA DAVIDSON, PORTLAND, OREGON

"The restructuring of OpenAI and its deal with Microsoft is an important milestone for the company's move forward towards AGI. It resolves the longstanding issue of OpenAI being organized as a not-for-profit (organization) and settles the ownership rights of the technology vis-a-vis Microsoft. The new structure should provide more clarity on OpenAI's investments path, thus facilitating further fundraising."

ART HOGAN, CHIEF MARKET STRATEGIST, B RILEY WEALTH, NEW YORK

"It certainly seems to be the in-vogue thing to do. Over the course of the last several weeks, everyone's come out and said what they are going to do with OpenAI. And I think that tends to become very self-fulfilling. So when the news gets dropped, you know, whether it's Adobe or today with Microsoft, you have got the potential to become an even more important player in the AI revolution."

(Reporting by Akash Sriram in Bengaluru; Editing by Shinjini Ganguli)

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