Owning Microsoft Stock Has Cost Steve Ballmer Billions

Steve Ballmer was CEO of Microsoft (NASDAQ: MSFT) from 2000 to 2014, which was aft his person Bill Gates stepped down. Ballmer was the 30th worker erstwhile helium joined successful 1980. The astir important fiscal determination helium made successful his beingness was to clasp onto his Microsoft shares. He owns 4% of Microsoft, which makes him the largest azygous shareholder. That ownership is the cornerstone of his nett worth, which Bloomberg puts astatine $139 billion, which is conscionable down Warren Buffett.

Ballmer’s ownership has taken a beating. His nett worthy has dropped by $29 cardinal this year, arsenic Microsoft banal is down 19% portion the S&P is up 2%. Microsoft’s marketplace headdress is $2.92 trillion, making it the fourth-most-valuable institution successful the world.

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Microsoft has taken this beating for 1 reason. It invested $13 cardinal successful OpenAI, which is inactive considered the manufacture leader, and got 27% of the company. Part of the woody was that Microsoft would person wide rights to the usage of OpenAI’s commercialized products. Over time, arsenic OpenAI saw the worth of those rights, the 2 companies became astatine odds.

The colony of the conflict was vague. In October of past year, the 2 companies announced, “The statement preserves cardinal elements that person fueled this palmy partnership—meaning OpenAI remains Microsoft’s frontier exemplary spouse and Microsoft continues to person exclusive IP rights and Azure API exclusivity until Artificial General Intelligence (AGI).” Investors did not cheer the caller agreement.

What has go wide this twelvemonth is that Microsoft has fallen down successful organisation and “wins” with commercialized customers. A look astatine the Apple App Store shows that OpenAI's ChatGPT is the No. 1 download. Claude from Anthropic is third. Google Gemini is fourth, and xAI Grok is 20th. Microsoft Co-Pilot is not connected the list.

As OpenAI and Anthropic denote much and much endeavor sales, Microsoft is mostly quiet. Investors believed that AI-enhanced versions of Azure, Microsoft’s cloud-based business, would get a boost. Its astir caller net showed that gross from immoderate specified operation would beryllium slow.

Microsoft is good down successful the AI race. Nevertheless, it says it volition put $146 cardinal successful information infrastructure this year. Investors person crushed to inquire “why”? Ballmer is affluent capable that helium whitethorn not care.