Microsoft ends weekend of OpenAI drama with coup of its own

After three days of high drama at the world’s most closely watched startup, which many compared to a coup, Microsoft Corp. capped the weekend with one of its own: The software giant hired ousted OpenAI chief Sam Altman.

The moves reshape the world of artificial intelligence given that OpenAI is behind the hugely popular ChatGPT app that took generative AI into the mainstream, and Altman was its figurehead.

He was unexpectedly fired by OpenAI’s board on Friday, setting off a frenzied weekend campaign to reinstate him, led by OpenAI executives and key investors — including Satya Nadella, the chief executive officer of Microsoft, which had pledged more than $10 billion for the startup.

Instead, OpenAI’s board replaced Altman with Emmett Shear, the former CEO of Twitch, in a stinging rebuke to its investors. Nadella then announced that he had recruited Altman and Greg Brockman, another OpenAI co-founder who had quit in protest, to lead a newly formed in-house AI research unit at Microsoft, casting a shadow over the future of its prized investment.

Now OpenAI, which was in talks with investors about a $86 billion valuation, risks an exodus of employees to Microsoft and other rivals, and an end to its stunning growth. And the startup will face close scrutiny over its ability, or willingness, to turn its cutting-edge AI into profits.

At the heart of the divide is whether AI should be a commercial opportunity or is a potentially dangerous technology that needs to be checked and scrutinized at every turn.

Confidence

In a post on Linkedin, Nadella wrote that Microsoft remains committed to its partnership with OpenAI and has “confidence in our product roadmap.”

But by tapping Altman, Nadella acquired a driver for the new brand of AI captivating executives and politicians everywhere. At OpenAI, the co-founder was credited with kicking off a race for artificial intelligence supremacy from Washington to Beijing, inviting comparisons to Bill Gates and Steve Jobs.

On Monday, Brockman posted online that he and Altman had already recruited three OpenAI scientists to work with them at Microsoft. “The mission continues,” he wrote on X, the platform formerly known as Twitter. Microsoft’s shares climbed as much as 2.7% in pre-market trading in New York, after closing 1.7% lower Friday.

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