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OpenAI’s power struggle instigates overnight industry turmoil

Getty Images for TechCrunch
TechCrunch | Flickr

CEO of OpenAI Sam Altman was ousted by the OpenAI board of directors in what would kickstart a week of rapid developments at OpenAI starting Nov. 17.

OpenAI board of directors cited Altman’s communications with the board as reason for them no longer having “confidence in his ability to continue leading OpenAI.” Chief technology officer Mira Murati was installed in Altman’s place.

“I loved my time at OpenAI.” Altman wrote in a statement posted on X. “It was transformative for me personally, and hopefully the world a little bit. Most of all, I loved working with such talented people.”

Following his departure, investors and technologists supported Altman’s decision to accept cornerstone investor Microsoft Corp.’s offer to him and OpenAI co-founder Greg Brockman to lead Microsoft’s advanced AI research team, Microsoft Ignite on Nov. 20. 

“We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners,” Satya Nadella, CEO of Microsoft, wrote in a statement. “And we’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will join Microsoft to lead a new advanced AI research team.”

Conditionally, more than 700 of the 770 employees at OpenAI would sign a letter threatening to quit the company and join Altman under Microsoft’s new division unless the board resigns and Altman is reinstated as CEO.

Nadella reacted to the possibility of Altman returning to OpenAI as CEO by noting that Microsoft wants to partner with OpenAI and Sam, so “irrespective of where Sam is, he’s working with Microsoft.”

Additionally, Nadella commented on the leadership and governance of OpenAI, expressing that changes must happen for Microsoft to continue to partner and innovate with OpenAI. 

“Yeah, I mean, I think we definitely will want some governance changes. Surprises are bad, and we just want to make sure that things are done in a way that will allow us to continue to partner well; that’s about it,” Nadella expressed in an interview with Bloomberg. “This idea that somehow, suddenly changes happen without being in the loop is not good and we will definitely ensure that some of the changes that are needed happen and we continue to be able to go along on the partnership with OpenAI.”

After immense pressure from investors and Microsoft, OpenAI announced its board of directors would resign, and Altman would return with a new board of directors on Nov. 22 causing celebration among investors and partners.

“I’ve stated this before and I can state it again, I’m very happy to see Sam back.” Vinod Khosla, founder of Khosla Ventures, said on an episode of Bloomberg Technology. “He’s uniquely positioned for stewardship of this very important company. It’s much more than just a company. It is benefit of AI to humanity in a much larger way over the next few decades, and I think we restored the path.”

OpenAI’s new board changes make Murati return to her role as chief technology officer with Bret Taylor, co-CEO of Salesforce Inc., leading the board of former U.S. treasury secretary Larry Summers and co-founder and CEO of Quora Inc. Adam D’Angelo. However, Microsoft will be a non-voting observer, allowing the company to have more visibility of the internal workings of OpenAI.

A non-voting observer of a board is an entity that can attend all company meetings and access confidential information but does not vote on board decisions.

Altman went on to thank OpenAI’s staff for their hard work in an unclear situation. He noted that the artificial intelligence startup’s three priorities are to advance its research plan, continue to improve products and improve its governance structure by building a board of diverse perspectives.

“I have never been more excited about the future,” Altman wrote in OpenAI’s blog. “I am extremely grateful for everyone’s hard work in an unclear and unprecedented situation, and I believe our resilience and spirit set us apart in the industry. I feel so, so good about our probability of success for achieving our mission.”

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