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For the past four years, Sam Altman has been OpenAI’s most prominent CEO. Because of ChatGPIT’s explosion this year, he has become – by extension – the most visible face of the generative AI movement.
On Friday, the tech world was rocked by the news that Altman had been removed from his position by OpenAI’s board of directors. The reason given was, “He was not consistently forthright in his communications with the board.”
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But the plot has thickened. Microsoft, which has invested billions of dollars in OpenAI, has roped in not only Altman, but also OpenAI co-founder Greg Brockman. The two will lead a “new advanced AI research team,” according to Microsoft chief Satya Nadella.
This morning, the plot has become even more complicated. According to a report in Wired, “Nearly 500 OpenGL employees have signed a letter saying they may leave and join Sam Altman at Microsoft unless the startup’s board resigns.” And doesn’t reappoint the ousted CEO.”
It’s a wild thing. But what does this mean for ChatGPT and the future of Generative AI?
Let me be clear: most of this is pure speculation. I am not aware of any additional facts. First, let’s review what we know:
- ChatGPT requires a tremendous amount of resources to run.
- Microsoft has invested billions of dollars in OpenAI.
- Microsoft has used OpenAI technology in many of its products.
- ChatGPT is extremely popular.
OK, let’s start with some speculation: OpenAI should have a bonkers burn rate. There is no way for it to be profitable at this point. Therefore, it has to rely on money from investors, of which Microsoft is the 800-pound gorilla.
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No one has a clear view of what Altman did to anger his board of directors. For now, I’m going to theorize that his crimes were business in nature and not personal behavior in nature. This is my guess based on the tone of the board’s announcement.
Microsoft clearly finds no fault with Sam Altman. If this were the case, a major role for him at OpenAI would not have been publicly announced within days of his dismissal.
Based on the report that OpenAI employees signed a letter demanding Altman’s return, it’s fairly clear that Altman has loyalty to his team – and OpenAI’s board does not.
Given all this, I see three possible ways forward.
1. OpenAI strives to continue business as usual
Over the weekend, the company moved former chief technology officer Mira Muratti to the interim CEO position. Since then, former Twitch CEO Emmett Shearer has apparently been brought in as CEO, at least According to his Twitter/X feed,
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But what if most of the company’s development team moved away from Microsoft? What will Microsoft do? Will Microsoft continue to work on ChatGPT or will this lead to a complete loss of confidence in OpenAI? Will OpenAI be able to operate its existing infrastructure at markedly reduced capacity?
In my outsider’s opinion, this is a nightmare scenario. This is the “OpenAI is going to try to make it work but it will never be the same” scenario. This opens the door to a wide range of competitors, including Microsoft, and completely destroys the incredible momentum OpenAI has had over the past few years.
This scenario would confirm the OpenAI board’s actions were an unforced error, a self-inflicted wound that could prove fatal.
2. Microsoft has created a ChatGPT competitor
In this scenario Microsoft has launched a Manhattan Project-scale effort to create a full-on ChatGPT competitor at warp speed. Keep in mind that Bing Chat, or Copilot, is essentially a new form of the core ChatGPT technology using the ChatGPT API. My guess is that Microsoft is already working on some research in this area; Bringing in Altman and possibly more of his team speeds things up tremendously.
There are obviously issues with intellectual property and trade secrets, including what Altman and Brockman can and cannot bring from their former employer and what they can give to Microsoft.
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I don’t see this scenario as particularly effective, given how much effort Microsoft has put into embedding existing OpenAI technology into its latest offerings. There is no doubt that Microsoft could create such a competitor, but compared to Scenario 3 it is not the best use of its time and resources.
3. Microsoft acquired OpenAI
Microsoft has acquired what is left of OpenAI and has terminated OpenAI’s current board of directors. Much of OpenAI’s existing technology already runs on Azure, so it could make a lot of sense from an infrastructure perspective.
It also makes a lot of sense from a leadership perspective, given that Microsoft now has spiritual and possibly soon technical leadership of OpenAI. Plus, if OpenAI employees were already planning to leave, it makes a lot of sense for Microsoft to add OpenAI to the company’s vast portfolio.
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I think this may be the only practical way for OpenAI to survive. If OpenAI were to lose a large portion of its innovation team, it would be a shell operating on existing technology that is moving at a fast pace on the market. Competitors will quickly overtake it.
But if it were brought to Microsoft, it could build on the momentum it already has, under the guidance of comfortable leadership, and continue to execute on the plans already in place.
Given how much money Microsoft has already poured into OpenAI, this may not be as big a purchase as another potential buyer would require.
David’s final thoughts
All of this assumes that OpenAI’s board of directors made a big mistake and that Altman is not fundamentally guilty of any serious wrongdoing.
Furthermore, Microsoft’s approach to innovation will be significantly different from the culture of innovation that Altman created inside OpenAI. It’s unclear how much friction Microsoft’s involvement will create on the gears of that innovation engine.
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It’s also unclear how making ChatGPT into a Microsoft product — which Microsoft now calls Copilot and was formerly Bing Chat — will impact ChatGPT’s tremendous growth rate.
We will all just have to wait and see.
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