Market Commentary

Lawmaker Sells MSFT Amidst Ongoing OpenAI Saga

Aisha Khan
13 Mar 2024 · 2 minutes read

The trading of stocks by congressional members has sparked concerns regarding the possibility of insider trading and conflicts of interest. Some American stocks traded by lawmakers are among the best performing in the market, one example being Microsoft Corp (MSFT:US).

Microsoft ranks among Congress's most actively traded stocks, with 133 reported transactions of MSFT stock by U.S. Congress in the past year alone. This week, Representative Suzan DelBene brought attention to this issue by disclosing her spouse's sale of shares in the tech giant. The sale involved vested shares sold to a separate trust and was valued between $100,001 and $250,000.

A notable factor in this trade is the timing; Rep. DelBene reported the sale not too long after Open AI, which is backed by MSFT, struck a valuation of almost $80 billion

On Feb 17, 2024, Open AI completed a deal with venture firm, Thrive Capital, similar to several other offers from venture funds that the ChatGPT owner received in 2023. Microsoft itself invested as much as $10 billion in Open AI in Jan 2023. 

The timing of this cashing in also comes when OpenAI has been slammed with a lawsuit by Elon Musk, Tesla CEO and X’s owner. The lawsuit alleges that OpenAI, the creator of ChatGPT, and its CEO Sam Altman have forsaken the organization's original goal of advancing AI for the betterment of humanity rather than pursuing financial gain. 

OpenAI responded to this on Monday saying, “There is no Founding Agreement, or any agreement at all with Musk, as the complaint itself makes clear,” in a document on file with California’s superior court for San Francisco County. 

On the other hand, Microsoft's approach to AI has progressively centered around its collaboration with OpenAI. As a consequence, some executives have left and there has been a reduced emphasis on Microsoft's own internal AI services which have been disappointing to insiders.

Other Congress members who recently traded in MSFT stock include Rep. Ro Khanna and Rep. Josh Gottheimer. Both lawmakers sold MSFT shares for up to $15,000 each on Feb 2 and Feb 8 respectively. Later in the same month, Rep. Gottheimer bought as much as $27 million worth of MSFT shares, as reported in his March 8 disclosure.