Why Microsoft is so keen to get Sam Altman inside - or back at the OpenAI helm

Comment Microsoft may emerge as the real winner from all the shenanigans at OpenAI if the Azure titan can bag the lab's co-founder and now-ex CEO Sam Altman. Seeing him back at the helm of the lab, with some changes made, would also please Microsoft.

There's no guarantee he'll join the Windows giant or go back to OpenAI. Meanwhile, the vast majority of OpenAI's staff - by now reportedly 700 of 770 - have pledged they'll quit and possibly join Altman at Microsoft unless he is reinstated at OpenAI and the board resigns. Nothing so far has been officially decided or explained. This saga twists and turns every other hour.


On Friday, the tech industry was stunned to learn the OpenAI board of directors had turned on Altman. After sacking him, the panel issued a damning statement accusing the now-former chief exec of not being "consistently candid in his communications" with the board.

It's not clear what the upstart's leader did exactly to be kicked out so abruptly, though it's clear his fellow board directors had lost confidence in him and wanted him out. There are many theories being thrown around, and a leading one right now is that there were concerns among at least some board members that OpenAI was commercializing its content-generating neural networks at too fast a rate without sufficiently addressing the risks. Friction there led to Altman's ousting, we can well imagine.

Another rival?

Hours after Altman was chopped, OpenAI co-founder and president Greg Brockman - who had also been removed from his board chairman role on Friday - announced his resignation, and a handful of senior engineers followed suit. Rumors that the group would go off and form their own shiny new AI venture immediately began swirling around. That would have been an obvious next move for Altman - a well-known figure in Silicon Valley who has more than a decade of experience in the startup world, and someone who would have no problem raising money and attracting talent.

(OpenAI has already had a split of sorts, with ex-staff leaving a while ago to form safety-conscious AI startup Anthropic. It's claimed OpenAI's board had hoped Anthropic would be interested in a merger, with the latter's CEO Dario Amodei taking over the biz following Altman's departure.)

OpenAI's investors knew Altman's removal was going to be sub-optimal for them and for the org. Thrive Capital, Khosla Ventures, and Tiger Global Management are among those shareholders trying to bring the top boss back to OpenAI, and are still reportedly keen for him to return.

He could just go back

There was and still is talk of Altman possibly coming back to OpenAI as long as certain conditions are met - such as changes to the organization's governance, presumably to stop another fiasco like this happening. OpenAI deliberately has a small board, and it was supposed to have the ability to quickly and easily take significant steps, like what we saw at the end of last week, to curb the lab if (say) its AI systems got out of hand.

As OpenAI's largest investor, with a 49 percent stake, Microsoft had hoped to repair the situation - after all, it's plowed billions of dollars into the compute-hungry lab, and injected the upstart's family of content-generating, conversation-driven neural networks into all corners of the MSFT empire, from Azure and Bing to Windows and GitHub, under the Copilot brand. Microsoft wasn't about to let this big bet go south so easily.

For what it's worth, Microsoft signaled on Friday it was "committed" to OpenAI and that it had a long-term agreement to access the upstart's tech as needed to roll out products and services as planned. We can't imagine Microsoft being left totally high and dry if OpenAI imploded, though it's obvious the tech giant needs the lab to continue its research and development work and that Microsoft would like some stability brought to this cluster-fsck.

Microsoft's share price was dropping in response to this drama. Yet it managed to revive its stock, and even pushed it higher, by having CEO Satya Nadella announce on Monday that Altman and Brockman will join the enterprise IT giant to lead an AI research arm (and presumably keep that GPT tech flowing into Microsoft 365 etc.) Microsoft must keep Altman, Brockman, and the OpenAI team within arm's reach, either within Redmond or at OpenAI. The worst-case scenario for the Windows goliath, in our view, is to have invested in and bet on a machine-learning lab that has not only lost its Steve Jobs but also the majority of its engineers and boffins.

Despite Nadella's confidence earlier, a deal hasn't actually been finalized, seemingly because Altman would rather go back to the $80 billion startup he co-founded than bury himself in Redmond's corporate machine. Rumors persist that Altman may indeed return to the organization he started, and Microsoft has indicated it would be OK with that, provided those aforementioned conditions are met. The OpenAI board would most likely have to go in that case.

Speaking of which, OpenAI co-founder, board member, and chief scientist Ilya Sutskever - who was reportedly instrumental in the board rebellion against Altman over safety concerns regarding the lab's state-of-the-art models - has since backtracked on his defenestration of the CEO.

"I deeply regret my participation in the board's actions. I never intended to harm OpenAI. I love everything we've built together and I will do everything I can to reunite the company," he said on Monday.

Sutskever has previously, along with Altman, banged on about the potential dangers AI poses to society and the need for guardrails, regulations, and other protections to rein it in. Critics have said this fear-mongering suits OpenAI because it encourages lawmakers and watchdogs to put in place rules and requirements that smaller rivals can't cope with, leaving the market to well-resourced incumbent players like OpenAI.

The OpenAI board made CTO Mira Murati interim CEO, and after she reportedly indicated her support for Altman to return, the directors on Sunday instead installed former Twitch boss Emmett Shear as chief exec.


There are three things that AI companies need in order to take off: money, talent, and compute power. Under Altman, OpenAI had all three. It may not have that in the future, if the majority of the remaining staff from the 700-plus headcount follow through on their threat to resign unless Altman is reinstated as CEO.

Bear in mind, OpenAI offers huge compensation packages to staff, and presumably if Microsoft absorbs those workers, as it's offered to do, it'll match those figures. There's no requirement to go to Microsoft, though, and on Monday Salesforce CEO Marc Benioff threw his hiring hat into the ring to snap up disgruntled OpenAI staff.

"Salesforce will match any OpenAI researcher who has tendered their resignation full cash & equity OTE to immediately join our Salesforce Einstein Trusted AI research team under Silvio Savarese," Benioff said.

"Send me your CV direct ... Einstein is the most successful enterprise AI Platform completing 1 Trillion predictive & generative transactions this week! Join our Trusted AI Enterprise Revolution."

Doom and boom

The reasons for Altman's ousting remain opaque, though as we said there is speculation it's down to a deep ideological clash between AI doomers and boomers within the biz. Those in the doomer camp believe AI is too risky and that development must be slowed down, and they didn't approve of Altman's push to commercialize the technology so quickly. Those in the boomer camp believe the promise of AI is just too great to ignore, and it should be built as fast as possible.

If Altman does indeed switch to Redmond and leaves his startup ideologically divided, it spells the end for OpenAI. Because, assuming Altman et al join Redmond, who will Microsoft favor: an external business that may hold back on releasing state-of-the-art technology over safety concerns, or an internal team that promises to be bolder and faster in its execution to unleash more powerful models?

Doomers should realize that Altman's abrupt exit isn't well-aligned with their vision. It has only driven him into the arms of Big Tech, whose ultimate goal is money and growth.

Altman at Microsoft would have access to even more money, compute, and maybe hundreds of his former employees. Meanwhile, Microsoft would get what it really wants: a chance to control what could be the most powerful computing technology in the world.

And best of all, it didn't really cost Redmond anything it can't easily afford. ®

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