Microsoft (MSFT) stock reaches an all-time high on headlines that Former OpenAI CEO Sam Altman will be joining the tech giant after being ousted by OpenAI's board last Friday.

Macquerie Lead Software Equity Research Analyst Fred Havemeyer attributes this unfolding coup to Microsoft CEO Satya Nadella as the tech company already owns 49% of OpenAI and recruiting the artificial intelligence firm's leadership would push Microsoft one step further into owning its AI model.

"We think there's still tremendous value here, whether or not OpenAI remains an independent, commercialized, and really border-pushing tech company, or whether this ultimately is internalized within Microsoft as its own AI venture," Havemeyer explains to Yahoo Finance. "We continue to think that they win."

Click here to watch the full interview on the Yahoo Finance YouTube page or you can watch this full episode of Yahoo Finance Live here.

This post was written by Luke Carberry Mogan.

Video Transcript

- Fred just heard us talking about this.

Like, we don't even know if one moment to the next if indeed Altman is going to let-- end up at Microsoft.

As somebody who's trying to analyze this company and its future profits, just give us, first of all, a little color on how you're following all this and analyzing it in real time.

FRED HAVEMAYER: Well, following an analyzing in real time is actually very accurate, because I think I was publishing at around 4 AM last night when the news was coming out that Microsoft was hiring Sam Altman as CEO of a new AI venture as Satya Nadella published on X and/or Twitter.

So the way that I'm thinking about it is that, right now, I think Satya has essentially pulled off a coup that I have not seen the likes of before in the tech market.

He's pulled in and brought in Sam Altman CEO of, as we've all been talking about here, CEO of OpenAI, and one of the clear visionaries in the entire generative AI landscape right now.

And also, of course, someone who has been leading the commercialization push within OpenAI.

And following that we've heard the news that, now the majority of engineers at OpenAI are considering leaving the company and potentially moving over to Microsoft, which appears to be ready to welcome them with open arms.

So I think in the range of outcomes here, we see either an opportunity where Microsoft ends up consolidating and essentially acquiring OpenAI without actually having to tender any sort of acquisition under the present scenario, where Sam Altman is running as CEO this own AI venture within Microsoft.

And a second scenario, even if we go a route where Sam Altman returns to OpenAI, I think Microsoft would continue to benefit.

We would see continued commercialization likely of models and an emphasis on shipping product which if you recall back with the Microsoft partnership, OpenAI has delivered to Microsoft a licensing agreement that gives them-- that gives Microsoft Access to every large language model and AI model that OpenAI produces up to what the board defines as artificial general intelligence.

So it's a scenario where I think Satya played everything very well.

I think that overall just reinforces our view that Microsoft is the top pick in the generative AI landscape for us.

- But Fred let me ask you this though, Microsoft at the same time, it has this big stake in OpenAI right and it was valued, I think Fred, at something like $86 billion.

But now we're in this thing, we don't know what OpenAI is worth, how should investors-- how are financial analysts thinking about that?

FRED HAVEMAYER: I think when we consider what that partnership to begin with, part of it has been cash, and part of it has been compute credits on Azure.

So if we think about this partnership in general it's been one that's benefited Microsoft also through its commercialization of OpenAI such that, if we look at the last quarter, we estimated that Microsoft was operating in Azure at about a $1.6 billion run rate for its generative AI related services.

So with the amount of revenue that Microsoft is generating through existing copilot solutions in addition to the commercialization of things like OpenAI hosted on Azure through this licensing agreement, we think there's still tremendous value here.

Whether or not OpenAI remains an independent, commercialized, and really border pushing tech company, or whether this ultimately is internalized within Microsoft as his own AI venture.

We continue to think that they win.