Last week, Sam Altman was relieved of his duties as OpenAI's CEO, and will be replaced by former Twitch head Emmett Shear. Initially, OpenAI had stated Mira Murati, the technology chief, would hold the position on an interim basis. Altman is now joining Microsoft, where he will lead a new AI research group. Speculations are high on the implications this change will have for OpenAI, Microsoft, and the AI industry as a whole.
The last few days have seen a flurry of activity in the AI industry, as tech experts consider the implications of this shift for the developing sector and some of its more noteworthy players. OpenAI, the company that pushed AI into the spotlight last year with its ChatGPT release, declared Friday that its CEO Sam Altman had been removed from his role, with Mira Murati taking over as interim chief executive. But OpenAI changed direction soon after, instead opting to hand the job of caretaker CEO over to Emmett Shear, the former Twitch chief.
Ilya Sutskever, one of the members of the OpenAI board that had a hand in Altman's dismissal, stated his "deep regret" over his involvement in the decision, adding that he never intended to cause harm and would work to reunite the company. Altman himself, meanwhile, was quickly snapped up by Microsoft, which put him in charge of a new advanced AI research team, featuring former OpenAI Board Chair Greg Brockman and other employees from the company.
Richard Windsor, founder of digital research company Radio Free Mobile, suggested on Monday's "Street Signs Europe" that this could be a case of "damage control" by Microsoft, given its substantial investments in OpenAI, estimated to total around $13 billion. Microsoft and OpenAI have already joined forces in projects such as the Bing search engine, and the vast majority of the value of this collaboration has been linked to OpenAI's founders and engineers.
Rishi Jaluria, managing director for software equity research at RBC Capital Markets, highlighted on Monday's "Street Signs Asia" how the vision set by Altman is in line with what Microsoft wants, in terms of both commercializing and responsibly using AI. Other experts have been equally supportive of Microsoft CEO Satya Nadella's decision to bring Altman in-house.
The four-person board at OpenAI was "like a group of kids at a poker game who thought they had won until Nadella and Microsoft swooped in with a grand gesture that stunned Wall Street and Silicon Valley," according to Dan Ives, a Wedbush Securities tech analyst. He went on to say that Microsoft was now in an even "STRONGER" position from an AI perspective, thanks to the involvement of Altman and Brockman. Aaron Levie, CEO of cloud-sharing company Box, praised the move on X (formerly known as Twitter), calling it "incredible execution by Satya in one of the most dynamic situations in tech history." Aviral Bhatnagar, an investor at Venture Highway, echoed this sentiment in a post on X, commenting that it was clear why Satya Nadella was "one of the greatest tech CEOs of this generation," noting that he had successfully managed to keep Altman in the fold, navigate the chaos and wild board decisions, and not undermine OpenAI.
Windsor postulated that OpenAI could be significantly impaired if more personnel followed their CEO, Altman, to Microsoft, with tech chief Murati being one of the key potential departures. "If she goes off with Sam and the others to join Microsoft, what's left of OpenAI? Arguably not much," he stated. Subsequently, it has been reported that OpenAI employees have been expressing their sentiments about the situation on X, and some have even gone as far as to suggest that the board should resign in order for them to remain with the organization. This could result in a change in dynamics between OpenAI and Microsoft, as Jaluria pointed out. "I wouldn't be surprised if coming out of this, Microsoft wants to have more of a say in this and control more of the destiny because absolutely their fortunes in AI are tied to OpenAI," he commented. He concluded that the two organizations will remain essential partners.
Shear, the new interim CEO of OpenAI, has been highly critical of the chaotic developments, calling them "very badly" handled and damaging to trust in a post on X. He will launch an investigation to examine the process and publish a report within 30 days. Experts, including Windsor, have noted that the situation could harm OpenAI's reputation and public confidence, while Ives labelled the events a "circus clown show" and a "tainted move". Benaich added that it showed "no one is immune from the laws of corporate physics", and "one bad decision" can have immense consequences. When contacted by CNBC, OpenAI did not reply.
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