Microsoft-backed OpenAI (MSFT) just revealed its latest AI models, “o3” and “o3 mini,” which the company says blow past previous AI benchmarks and set new standards for reasoning and problem-solving. During a livestream, CEO Sam Altman shared that the o3 models are exceptionally strong in coding, math, and advanced science tasks, while the o3 mini offers a cost-efficient option perfect for programming.
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The models are still in internal safety testing, but OpenAI is inviting the public to apply as testers until January 10, with plans to launch both models by the end of January. Interestingly, the o3 model is already breaking barriers. In fact, OpenAI’s Mark Chen pointed out that current AI benchmarks are maxing out, and tougher challenges are needed as a result.
Additionally, Greg Kamradt, President of the ARC Prize, praised the significance of the model’s impressive 87.5% score on the ARC-AGI test, which is a benchmark specifically designed to evaluate AI’s reasoning abilities by tackling complex, human-like problem-solving tasks. Kamradt noted that it took AI models years to progress from near-zero performance to just 5% on this test. As a result, o3’s breakthrough score is a game-changer and a clear indicator of how far AI reasoning capabilities have advanced.
An End to “12 Days of OpenAI”
OpenAI’s o3 models were the final announcement for its “12 Days of OpenAI” event, which also introduced new tools like free ChatGPT Search, the Sora AI video generator, and integration with Apple’s operating system. With the race for AI dominance intensifying, OpenAI’s o3 models are a major leap forward for smarter and more powerful AI.
Is MSFT Stock a Buy?
Although you cannot directly invest in OpenAI, you can buy shares of Microsoft, which has a 49% stake in the company. And according to analysts, Microsoft stock has a Strong Buy consensus rating among 29 Wall Street analysts. That rating is based on 27 Buys and two Holds assigned in the last three months. After a 17% rally in its share price over the past 12 months, the average MSFT price target of $499.19 implies 14.16% upside potential.
