After a tumultuous period of boardroom upheavals and attempted counter-moves at OpenAI, Microsoft Corp. announced the appointment of Sam Altman to lead a new artificial intelligence research team. This move came as a surprise for Microsoft, given its substantial investment in OpenAI and its former CEO, Altman.
However, this may not be an ideal outcome for either Altman or Microsoft. A faction of OpenAI investors is advocating for Altman’s reinstatement as the chief, a move that Microsoft CEO Satya Nadella has expressed openness to.
The majority of OpenAI’s approximately 770 employees have signed a letter to the board threatening to resign unless the directors step down over their handling of Altman’s termination. The letter mentions Microsoft’s assurance of positions for OpenAI employees at a new subsidiary if they choose to join.
If successful, this would essentially be an acquisition without a formal agreement, initially appearing advantageous for Nadella. Despite Microsoft’s shares reaching an all-time high after the news, Altman’s hiring comes with complexities. Onboarding numerous new employees would be costly, especially in a year when Microsoft froze salaries for full-time workers.
Moreover, Microsoft still has a commitment of over $13 billion to OpenAI, making it unfavorable for Microsoft to disrupt the startup. Any employees joining Microsoft cannot replicate their work on OpenAI properties without risking claims of trade-secret theft. This is why there is a strong push to reinstate Altman at OpenAI rather than starting anew.
Nadella has indicated that Microsoft will make the best of the situation, emphasizing Altman’s autonomy at Microsoft. However, the challenge lies in winning over OpenAI engineers and computer scientists concerned about joining a corporate giant.
Altman’s AI team, even if granted independence, may face competition from existing AI and research groups inside Microsoft. Tensions could arise as different teams vie for resources. Altman’s various side projects, such as the crypto venture Worldcoin and his recent attempt to raise funds for an AI chip company, could also pose challenges.
Nadella mentioned addressing the governance aspects of Altman’s outside ventures but emphasized that Altman likely accepted the job at Microsoft with a commitment to dedicate his full time. Altman expressed optimism about the new arrangement, emphasizing unity and commitment for one team and one mission, although it remains unclear which team he was referring to.
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