Investors were more bullish on Microsoft in 2023, sending the stock up more than 50%, its best year since 2009. The driving force was Microsoft's intimate relationship with ChatGPT creator OpenAI, which sparked the generative AI boom and led to a historic increase in investments.
Microsoft is OpenAI's leading backer, having poured nearly $14 billion into the AI startup. Through the partnership, Microsoft gets a lot of cloud business but also spends heavily on building out infrastructure.
The relationship changed in an important way last week, when Microsoft said OpenAI will no longer use Azure on an exclusive basis, except when it comes to handling incoming queries from developers. Going forward, OpenAI will have to check with Microsoft when it seeks more computing capacity, and Microsoft will be able to accept or turn away the request.