Microsoft to invest $10bn in ChatGPT owner

In today’s top stories, Virgin Orbit’s first space launch fails, Rolls-Royce reports a boom in luxury car sales and Microsoft is said to be in talks to invest in ChatGPT owner OpenAI. Chinese self-driving car sensor company Hesai mulls a US IPO and Goldman Sachs says Alibaba could surge by 25%.

Virgin Orbit crashes and burns

The UK’s first ever space launch failed on Monday night when the Virgin Orbit [VORB] rocket suffered an anomaly, casting doubts over whether future missions will take place. The company’s cash reserve had dwindled to $71m by the end of Q3 2022 and, in November, it announced a $25m investment from Richard Branson’s Virgin Group. The Virgin Orbit share price was down more than 23% pre-market.

Luxury cars in demand

Luxury automaker Rolls-Royce [RR.L], a subsidiary of BMW [BMW.DE], sold a record 6,021 vehicles in 2022, up from 5,586 in 2021. While there was a “single-digit drop” in China, its second-biggest market after the US, the country still made up a quarter of total sales. And with Chinese consumers predicted to spend big following the country’s reopening, sales should rebound in 2023. “We haven’t seen any slowdown or downturn,” CEO Torsten Muller-Otvos told CNBC.

Microsoft to leverage ChatGPT

The inevitable has happened. Microsoft [MSFT] is in talks to invest $10bn in ChatGPT owner OpenAI, which would value the startup at $29bn, reported Semafor. There are also rumours circulating that the tech giant will integrate ChatGPT into its search engine Bing in a bid to challenge Alphabet’s [GOOGL], noted Oppenheimer analyst Timothy Horan last week. The Microsoft share price is currently being dragged down by cloud growth concerns.

China lidar producer eyes US IPO

Shanghai-based Hesai Technology, a developer of lidar sensors for self-driving vehicles and robotic applications, is weighing up whether to list in the US. The terms of the deal haven’t been disclosed, but an IPO filing could come as early as next week. The timing could make sense given the rebound in investor sentiment on China. VinFast, a Vietnamese rival to Tesla, could list in the US in Q2 this year.

Goldman Sachs bullish on Alibaba

China’s economic recovery could elevate the Alibaba [BABA] share price, according to Goldman Sachs, which has added the stock to its conviction buy list. “[T]he worst is behind us after two years of downward earnings revisions with the largest room for valuation multiple repair amongst the mega-caps as its top line growth resumes,” wrote analyst Ronald Keung in a note seen by CNBC. Its new price target of $138 implies an upside of 24.5% as of 10 January.