By Moshe Wiesenberg
When most college students hear “OpenAI,” the first thing that comes to mind is ChatGPT, a chatbot students use for homework and explanations and to generate all sorts of written materials. Released in November 2022, ChatGPT is becoming extremely prevalent in our daily lives. According to the American Psychological Association (APA), 58% of Americans under 30 reported having used it. Though OpenAI may be most associated with this creation, the company’s impact extends far beyond its chatbot. OpenAI has become one of the most powerful forces in the stock market.
Over the past year, the “Magnificent Seven” high-performing technology stocks — Alphabet, Apple, Amazon, Meta, Nvidia, Tesla and Microsoft — have invested hundreds of billions of dollars into AI research, infrastructure and partnerships. Almost every week, another tech giant announces a deal involving OpenAI or AI chip suppliers, and each announcement leaves its mark on the markets. As major companies try to stay ahead in the artificial intelligence race, their investments in OpenAI create massive swings in the stock market.
Some may have thought that Amazon had been “falling behind” in the AI race until it signed a massive seven-year, $38 billion cloud deal with OpenAI this past week. After signing the deal, Amazon’s stock jumped about 4%, an additional boost after Amazon’s strong third-quarter earnings pushed the stock up nearly 10% the week before. Under the agreement, Amazon Web Services (AWS) will provide the computing power OpenAI relies on. For investors, this partnership signaled that Amazon is officially back in the AI race, and the stock market reacted strongly to this news.
One of the biggest OpenAI-related shifts in the stock market came from a deal with Advanced Micro Devices (AMD), a semiconductor company. OpenAI agreed to buy six gigawatts of AMD chips, and it received warrants for up to 160 million AMD shares if certain expectations for the future are met. This news sent AMD’s stock up 24% in a single day.
Meta has also invested billions in AI, but unlike Amazon and AMD, its stock sometimes falls after AI announcements. Investors are cautious because Meta has a history of spending heavily, and some worry that large AI investments could become another expensive project without clear returns. Even though Meta is building powerful AI models and hardware, the market reacts more skeptically than it does to companies like Amazon or Nvidia.
Perhaps the most surprising effects of the AI boom are its impacts on seemingly unrelated companies. Anything touched by OpenAI or Nvidia can suddenly spike. For example, several Korean chicken companies surged 20-30% in a day simply because Nvidia’s CEO was photographed eating fried chicken in Seoul, South Korea. After being mentioned alongside AI initiatives, some small robotics companies saw their stocks surge. These reactions show how powerful AI hype has become, that even rumors or photos can move markets.
With tech giants dominating the S&P 500’s gains and AI making the loudest noise on Wall Street, OpenAI’s influence is evident all over the markets. Its partnerships create new winners, and its announcements can make major impacts on the markets. Whether or not there is an AI bubble, for better or for worse, OpenAI has become one of the biggest forces in the stock market today.
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