Microsoft (MSFT) formally announced updated terms of its partnership with OpenAI, following the MOU outlined in September, under which OpenAI has contracted to purchase an incremental $250B of Azure services and Microsoft will no longer have a right of first refusal to be OpenAI’s compute provider, Truist analyst Terry Tillman tells investors in a research note. The 27% stake at $135B puts the OpenAI valuation at about $500B, which would not be an increase from previously reported media articles that covered the $6.6B in employee share sale in early October, Truist notes, adding that the OpenAI Foundation will direct an initial $25B toward advancing health breakthroughs and AI resilience initiatives. Truist has a Buy rating and $675 price target on Microsoft shares.
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