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The dramatic ouster of Sam Altman as chief executive of OpenAI and his subsequent corporate musical chairs has raised many questions about the future of artificial intelligence. But many analysts say the early win goes to Microsoft, whose hiring of Altman and potentially many of her loyalists will allow them to work together without the constraints of OpenAI’s nonprofit board.
Microsoft CEO Satya Nadella “has just scored his coup,” Macquarie senior enterprise software analyst Fred Havemeyer said in a note to investors on Monday.
Earlier Monday, Nadella announced that Altman — under whose leadership OpenAI turned the company into a Silicon Valley force — was joining Microsoft, along with former OpenAI president Greg Brockman, who stepped down in solidarity with Altman. . It was the latest twist in a weekend-long drama that began with OpenAI’s board announcing on Friday that Altman had been ousted, which surprised observers and shocked the industry.
Microsoft has teamed up with OpenAI, using its ChatGPT technology to power chatbots featured on its Bing search engine. In January, Microsoft confirmed it had invested $10 billion in OpenAI, which was founded as a nonprofit but grew into a developer of consumer products.
On Monday, the fate of OpenAI remained uncertain as hundreds of employees signed a letter threatening to leave Microsoft unless Altman was rehired and the current board resigned. Will happen. The board said in a blog post that it ousted Altman because he was not “consistently candid” with some of its members.
Working with Altman and those loyal to him without the oversight of a nonprofit board of directors could be an even more promising development for Microsoft than its initial OpenAI investment, said Adam Struck, managing partner of venture capital firm Struck Capital. .
“Microsoft is in the driver’s seat, because they have essentially acquired all the value of OpenAI for zero. … Now, they’ve got Sam and they’re no longer beholden to the 501c3,” Struck said, referring to a nonprofit organization. “What’s scary now, though, is that Sam was apparently fired for a reason. Now he will have no limits at Microsoft.”
Analysts had widely predicted that many OpenAI employees loyal to Altman would follow him to Microsoft, and Altman’s brain dump of OpenAI talent into the new Microsoft venture comes with less of a burden of distrust than a more official acquisition.
“There will never be an antitrust issue here because Sam was literally fired by the board,” Struck said.
If OpenAI employees move to Microsoft, the company will not only gain some of OpenAI’s most advanced intellectual property, but Microsoft will also effectively acquire OpenAI’s core distinguishing feature – its ambitious and experienced technical talent, Havemeyer said. .
The change comes as Silicon Valley’s biggest tech companies try to dominate the emerging AI market. Altman could go to any of the big tech companies, including Amazon, Google or Apple, Wedbush analyst Dan Ives wrote in a Monday note. “Instead he is safely at Microsoft headquarters and now leading the company’s major AI efforts, leading us to expect many key scientists and developers to leave OpenAI and move directly to Microsoft.”
Ives compared Microsoft’s hiring of Altman to “a move for the ages at the World Series of Poker” and said the company’s already strong AI position has now become even stronger.
Deb Raji, an AI researcher and Mozilla fellow, said Monday that an industry shakeup won’t happen immediately. post on x, formerly known as Twitter. Altman’s move to Microsoft could effectively halt the six months of development that some AI leaders had asked for this spring.
Raji wrote, “Whatever happens at Microsoft, it will take at least 6 months to get involved and move up – and in the case of Open AI, at least that much or more time to rehire and recover.” It will take.”
But OpenAI will never recover, at least as an organization that can compete with the most powerful companies in tech, said Sarah Kreps, director of Cornell University’s Tech Policy Institute.
As more than 700 OpenAI employees have threatened to leave Microsoft, “OpenAI now looks like it may end up as a shadow of its former self,” Kreps said.
And it may be that OpenAI re-emerges as a much smaller research organization that more closely adheres to its founding mission, said Havemeyer, the Macquarie analyst. He said if OpenAI loses most of its talent, a big question remains: What will happen to ChatGPT, which attracts more than 100 million weekly users?
Havemeyer said it’s possible the chatbot will be kept running on a “skeleton crew”, with resources still available through a long-term partnership with Microsoft.
“However, if ChatGPT underperforms, we think there will likely be an exodus of ChatGPT users to alternatives… or the product being pushed by Mr. Altman’s new team,” he said.