OpenAI is in a state of complete collapse, after former CEO Sam Altman was ousted in a shock board decision.
The exact reason for the board’s decision to sack Altman remains unclear, but it seems increasingly likely that it was more about a power play than anything else.
What is clear is that Microsoft, through quick action and decisive strategic leadership from CEO Satya Nadella, is poised to emerge a clear winner, regardless of what OpenAI ultimately looks like.
After what appeared to be tense negotiations yesterday, Nadella announced that both Altman and Greg Brockman will join Microsoft, where Altman runs his own AI group within the company as CEO.
Since then, approximately 500 OpenAi employees have also indicated that they will resign unless the board resigns and Altman and Brockman are reinstated, essentially destroying the company.
Everything is so fluid at this point, and so much has changed materially over the course of the weekend from Friday afternoon until now, that it’s hard to say exactly what Microsoft’s new OpenAI or AI cluster will look like by the end of the day.
But one thing is very clear: no one is better off now than they were before, except Microsoft.
And the market agrees: Microsoft’s stock price rose nearly five points early this morning in trading, reflecting investor confidence in Nadella’s moves.
Microsoft already had a significant ownership stake in OpenAI, thanks to multiple large investments, but the company also had other investors, none of whom could benefit from the entire team moving from the entity that was OpenAI to Microsoft’s wholly-owned and controlled internal AI group.
Microsoft could certainly benefit from its investment in OpenAI, but the price is high for a company with Microsoft’s resources, given the upside it could gain by essentially acquiring OpenAI’s core technology team.
Microsoft already provides much of the computing infrastructure for OpenAI’s technology, and now, it has been able to get the architecture and strategy behind OpenAI’s leadership but without having to deal with many of the regulatory hurdles that would have come from actually acquiring OpenAI: It’s very difficult for entities like the Competition Council to The EU would essentially challenge just a number of high-level appointments in exchange for proper integration.
It is known for certain that the Microsoft AI group under the leadership of Altman will include Greg Brockman, as well as GPT-4 leader Jacob Paczucki; Former Head of Readiness at OpenAI, Alexandre Madry; Researcher Simon Sidor and more.
Whether this will include chief open AI scientist Ilya Sutskever, who appears to have been involved in the revolt against Altman to begin with, is an open question. Sutskever confirmed on Twitter that he would not be going to Microsoft, but expressed regret on Twitter about his actions in an apparent bid. To reconcile with Altman and Brockman.
2023-11-20 18:37:00
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