Microsoft cofounder Bill Gates recently experienced a significant recalculation of his net worth by Bloomberg, which revealed a substantial decrease of approximately $52 billion, or 30% of his wealth. This adjustment, made on Thursday, reflects his extensive philanthropic giving through the Gates Foundation. Consequently, Gates' fortune shrank from over $175 billion to $124 billion, causing him to fall seven places on the Bloomberg Billionaires Index, moving from fifth to twelfth position.

Remarkably, Gates now trails his former assistant and successor as Microsoft's CEO, Steve Ballmer, who has ascended to the fifth spot on the index with an estimated net worth of $172 billion as of Thursday's close. Beyond Ballmer, Gates also ranks behind other prominent figures such as Alphabet cofounders Larry Page and Sergey Brin, Nvidia CEO Jensen Huang, and his longtime friend, Berkshire Hathaway CEO Warren Buffett.

Bloomberg explained that the lowered appreciation rates used in calculating Gates' wealth were implemented to better account for his charitable contributions and align with the wealth estimate he provided in a May blog post. In that post, Gates had stated his fortune to be around $108 billion and publicly committed to donating virtually all his money via the Gates Foundation over the next two decades, with an estimated $200 billion to be disbursed before the foundation's projected closure in late 2045. As of December, Bill and his ex-wife Melinda French Gates have collectively gifted $60 billion to the organization, while Warren Buffett has contributed $43 billion.

While Gates still retains about 1% ownership of Microsoft and has received over $60 billion in stocks and dividends from the company, the majority of his current fortune is managed by Cascade Investment, a holding company that diversifies investments across real estate, energy, and both private and public companies.

Steve Ballmer's impressive financial ascent highlights a unique outcome for a former employee. When he joined Microsoft in 1980 as an assistant to the president, his compensation structure initially included a $50,000 base salary plus 10% of generated profit growth. This lucrative arrangement eventually led to the company offering him a significant equity stake instead. Ballmer succeeded Gates as CEO in 2000 and departed in 2014, holding a 4% stake in Microsoft. His loyalty to holding onto his Microsoft shares has proven immensely profitable, especially as Microsoft's stock has soared more than tenfold over the past decade to nearly $500 per share, establishing the company as the world's second most valuable with a $3.7 trillion market cap, second only to Nvidia. Ballmer famously recounted an exchange with Charlie Munger, who questioned his decision to retain Microsoft stock while the cofounders diversified, to which Ballmer simply replied, 'No, Charlie, but I'm that loyal.'