The drama unfolded on November 17, when members of the OpenAI board ousted the company’s founder and CEO Sam Altman. The artificial intelligence firm that developed the infamous AI chatbot ChatGPT was thrown into turmoil Monday after Microsoft, a majority shareholder in the startup, hired Altman while many of his former employees threatened to follow him out of the company he founded.
Microsoft has invested more than $10 billion into OpenAI for a 49% stake.
OpenAI Board Boots CEO Sam Altman, Throwing The Company Into Total Chaos
Developments during the weekend have left the AI sector in a state of shock and raised speculation that OpenAI wouldn’t survive the onslaught. Soon after Altman was sacked, the company named Chief Technology Officer Mira Murthi as the interim CEO.
According to reports, OpenAI’s board members signed a memo that said Sam Altman’s behavior and “lack of interactions” with the board “undermined the board’s ability to effectively supervise the company”.
Over the weekend, Microsoft and venture capital firm Thrive Capital pressured the board to return Altman to the top post at OpenAI. However, the board did not budge after the former CEO made it clear that he would only return to the company once the current board resigned.
In protest to Altman’s sacking, the startup’s co-founder and former president, Greg Brockman, also quit his role. To make matters worse, in an open letter to the board, over 700 of the company’s 770 employees, including other top executives, threatened to quit and called for the board’s resignation and Altman’s return.
On Sunday, OpenAI replaced Murthi with Emmett Shear, the co-founder of game live streaming platform Twitch. Shear announced on X that he would hire an independent investigator to look into Altman’s ouster and submit a report within 30 days. He also added that he plans to reform the company’s management and leadership team “in light of recent departures” and also drive in “significant governance changes if necessary”.
” Shear noted that the reason behind the board’s decision to remove Altman was not a “specific disagreement on safety”, nor does the board oppose his plans to commercialize AI models. ”
Microsoft Brings In Altman To Lead Its AI Research Team
On Monday, Microsoft announced that Altman and Greg Brockman would lead its new advanced AI research team. Although it is not clear what their exact roles will be at the company, the software giant said that it was committed to its partnership with OpenAI and would “move quickly” to provide Altman and Brockman with the “resources needed for their success”.
Microsoft CEO Satya Nadella wrote on X that he was “extremely excited” to bring the duo on board and was looking forward to getting to know the new management team at OpenAI.
It is widely believed that Altman and Brockman could bring more talent over to Microsoft, including OpenAI employees who have threatened to quit.
Meanwhile, OpenAI’s current interim CEO has been viewed by critics as someone who could slow down the company’s growth trajectory. Financial Times reported that prior to joining the company, Shear had publicly advocated for a slower rollout of AI technology.
Altman helped catapult OpenAI and ChatGPT to global fame, and in the past year, he has become Silicon Valley’s most in-demand advocate for the promise and potential dangers of artificial intelligence.
How Will Things Move Forward For Microsoft In The AI World With Altman Onboard?
Microsoft has a gem in their hands. Experts say that the changes at OpenAI won’t deter the tech giant’s competitive advantage in Generative AI. Microsoft’s massive dominance in the software industry could lead to its ChatGPT-powered Copilot assistant bringing home $35 billion in additional revenue, assuming that 482 million of its corporate customers would pay $60 a month for the service.
However, the bad news is that projections that estimated Microsoft’s 49% stake in OpenAI to be worth $100 billion could take longer to suffice. Back in October, analysts at Oppenheimer & Co. forecast that OpenAI could generate an estimated $1 billion in revenue in 2024.
Altman’s departure could potentially slow down the company’s growth and also diminish its share price. On the other hand, the startup’s rival large language model (LLM) providers such as Anthropic and Cohere should see their value rise as they become more appealing to investors.
Moreover, Generative AI increases the demand for Microsoft’s Azure cloud service, which is also leveraged by OpenAI for its AI models ChatGPT and Dall-E. Customers will also find it expensive to switch to other suppliers due to the tech behemoth’s high market share in the software industry. Another major advantage for Microsoft is that as a stakeholder in OpenAI, the software giant has unrestricted access to its LLMs.
Microsoft’s shares rose 2.5% on Monday to reach an all-time high of $379.18 per share.
The Altman-OpenAI-Microsoft saga hasn’t reached its endgame. There will be more clarity on how things will play out as time goes by. But this is a significant moment that will change the course of things in the AI sector.