The software giant Microsoft has picked up a significant gain on a bet that it made on the enterprise AI software firm C3.ai prior to its debut on the public markets and then an ensuing rise of over 200%. 

C3.ai sold shares to anchor investors at its initial IPO price of $42 per share, whereas Microsoft agreed to buy $50 million worth of shares, as revealed in a filing to the SEC. With a $50 million bet, it entails that Microsoft bought 1.19 million shares of C3.ai given its $42 debut price, whereas C3.ai has now soared to $130 a share, making Microsoft’s investment now worth nearly $155 million.

A profit of $105 million in just a few days is often unheard of, making C3.ai a very lucrative bet for Microsoft, which is not just an investor but a partner with the company. Under their partnership, C3.ai relies heavily on Microsoft’s Azure cloud platform both for hosting its data and attracting customers.

C3.ai debuted on the public markets on Wednesday and has enjoyed a meteoric rise for the few days it’s traded on the New York Stock Exchange. It’s among a crop of IPOs that came this December and have enjoyed stellar early debuts, others in that crop including Airbnb, which soared as much 115% on its first day of trading, and DoorDash, which has risen nearly 90% from its IPO price.

On similar terms, Microsoft is among a crop of investors that have scored lucrative profits from investments in companies that recently debuted, others in that crop including the Japanese tech conglomerate SoftBank and the venture capital firm Sequoia Capital, which both scored billions of dollars from DoorDash’s IPO.

More technology IPOs are expected to take place before the year runs out and could continue the streak of stellar debuts, depending on investor sentiment. They include the ‘buy now, pay later’ service Affirm and the e-commerce company Wish.

Photo: Microsoft CEO Satya Nadella by World Economic Forum is licensed under CC BY-NC-SA 2.0

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