Steve Ballmer has surpassed Bill Gates to become the wealthiest former CEO of Microsoft Corp. (NASDAQ:MSFT), riding on the back of the company’s AI-driven stock rally.

What Happened: Ballmer’s net worth has now reached $157.2 billion, making him the sixth-richest person globally, according to the Bloomberg Billionaires Index. This marks the first time Ballmer has overtaken Gates, the co-founder of Microsoft.

The surge in Microsoft shares, which have seen a 21% increase this year, has significantly contributed to Ballmer’s wealth. Over 90% of his net worth is tied to Microsoft shares.

On the other hand, Gates, with a fortune of $156.7 billion, has diversified his holdings. Approximately half of his wealth is held through Cascade Investment, which was formed from the proceeds of Microsoft stock sales and dividends. He also owns a $21 billion stake in waste-management company Republic Services Inc. (NYSE:RSG) through Cascade.

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Despite Ballmer’s recent financial success, Gates, 68, has been steadily reducing his fortune through philanthropy. Alongside his ex-wife Melinda French Gates and Warren Buffett, Gates has directed billions of dollars from his personal wealth to establish the $75 billion Gates Foundation, one of the world’s largest charitable organizations.

Why It Matters: Ballmer’s rise to the top of the Microsoft wealth ladder comes as no surprise, given his significant holdings in the company. As reported in January, Ballmer was set to earn an astounding $1 billion yearly in dividends from his considerable holdings in the tech giant. His ownership of nearly 333.2 million shares, about 4% of the company, was last revealed in 2014.

Ballmer’s success is also a testament to the potential for wealth accumulation through corporate leadership. As highlighted by Forbes, a distinguished few American billionaires have attained their status not by establishing companies or inheriting wealth but by climbing the ranks. Ballmer is among the 26 individuals who carved out their wealth by working within the system, from working as early employees or executives at major tech firms to navigating the upper echelons of hedge funds, private equity firms, and investment banks.

Ballmer’s achievement also sheds light on the ongoing debate around global wealth taxation. The U.S. has taken a firm stance against a proposed global wealth tax on billionaires, a move that has been a big relief for billionaires like Ballmer, Gates, and others.

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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote