OpenAI Goes From Stock Market Savior to Burden as AI Risks Mount

Wall Street’s sentiment toward companies associated with artificial intelligence (AI) is shifting — and it’s all about two companies: OpenAI is down, and Alphabet Inc. is up, Ryan Vlastelica reported for Bloomberg News.

Companies in OpenAI’s orbit are coming under heavy selling pressure. (Photo: Jernej Furman Wikimedia Commons) 

The maker of ChatGPT is no longer seen as being on the cutting edge of AI technology and is facing questions about its lack of profitability and the need to grow rapidly to fund massive spending commitments.

Meanwhile, Google’s parent company is emerging as a deep-pocketed competitor with reach across every part of the AI trade.

The maker of ChatGPT is no longer seen as being on the cutting edge of AI technology and is facing questions about its lack of profitability and the need to grow rapidly to fund massive spending commitments.

Meanwhile, Google’s parent company is emerging as a deep-pocketed competitor with reach across every part of the AI trade.

“OpenAI was the golden child earlier this year, and Alphabet was looked at in a very different light,” said Brett Ewing, chief market strategist at First Franklin Financial Services.

“Now sentiment is much more tempered toward OpenAI.”

As a result, shares of companies in OpenAI’s orbit — primarily Oracle Corp., CoreWeave Inc., and Advanced Micro Devices Inc., but also Microsoft Corp., Nvidia Corp., and SoftBank, which holds an 11% stake in OpenAI — are coming under heavy selling pressure.

Meanwhile, Alphabet’s momentum is boosting not only its own stock price but also those of related firms such as Broadcom Inc., Lumentum Holdings Inc., Celestica Inc., and TTM Technologies Inc.

The shift has been dramatic in both magnitude and speed. Just weeks ago, OpenAI was driving huge rallies in any company tied to it.

Now those connections look more like an anchor — a change with far-reaching implications, given how central the closely held company has been to the AI-fueled stock market rally of the past three years.