After a hectic few days, it looks like it’s all back to where it started: Sam Altman is returning to OpenAI as chief executive. The question now is what changes
Microsoft
can secure to improve its control of the artificial-intelligence start-up.
OpenAI reached an agreement in principle for Altman to return as CEO alongside the appointment of a new board of directors, the company said in a post on social media site X, the former Twitter, early Wednesday morning. The agreement is the culmination of a period of chaos.
Altman was fired by the previous board on Friday, causing the majority of OpenAI’s employees to threaten to resign. It left
Microsoft
(ticker: MSFT), which has a 49% stake in the ChatGPT creator after investing around $13 billion in the business, scrambling to contain the fallout by offering to hire its staff.
The return of Altman looks likely to bind OpenAI closer to Microsoft. However, several questions that will be crucial to the value of the AI start-up and its role in Microsoft’s future plans are still unanswered.
A major one will be why exactly the former board chose to fire Altman. Also, whether OpenAI will continue to be structured as a nonprofit company and does Microsoft still plan on building the in-house AI research team it announced this week.
At one point in the sage, it looked as though Microsoft might have been able to effectively acquire nearly all of OpenAI’s employees, who pledged to quit if Altman wasn’t reinstated. The overall value of OpenAI was expected to have been between $80 billion and $90 billion as calculated from a planned share sale.
Microsoft hasn’t sought to take full control of OpenAI, potentially to avoid triggering antitrust reviews by regulators. That doesn’t mean Microsoft won’t push for deeper involvement in the company.
“One thing I’d be very, very clear is we’re never going to get back into a situation where we get surprised like this ever again,” Microsoft CEO Satya Nadella said Tuesday during an appearance on the podcast On with Kara Swisher, before the announcement of Altman’s return to OpenAI.
Altman said in a post on X that he was looking forward to returning to OpenAI. OpenAI President and Co-Founder Greg Brockman, who also left the company last week, will return as well.
Nadella said Microsoft was encouraged by the changes to the OpenAI board. Microsoft is expected to push for a seat on an eventual expanded OpenAI board of up to nine people, according to The Verge, citing people familiar with the negotiations.
“We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners,” Nadella said in a statement.
Microsoft could also continue investing in its in-house AI efforts to lessen its dependence on OpenAI. On Monday, Microsoft touted its success in developing smaller AI models with similar capacities to larger models such as OpenAI’s GPT-4, with the benefit of running at lower costs.
Microsoft shares were up 0.8% at $375.99 in early trading on Wednesday. The stock is hovering slightly below its record high of $378.87 reached on Monday.
OpenAI’s new initial board will include former
Salesforce
(CRM) co-chief executive Bret Taylor as chairman, as well as former U.S. Secretary of the Treasury Larry Summers, and Quora founder Adam D’Angelo. Altman won’t be on the initial board.
D’Angelo is the only one remaining from the previous board, meaning the majority of the members responsible for removing Altman last Friday no longer are involved.
Write to Adam Clark at [email protected]
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