OpenAI’s announcement last night that Sam Altman will return as CEO, under a newly formulated board, brings an apparent end to a wild ride that spotlighted OpenAI’s unusual corporate structure, and demonstrated Microsoft’s tenuous control over the situation despite its giant stake in the company.
Although the details are still being worked out, according to OpenAI, it’s not yet clear if Microsoft will emerge with more oversight, or at least better insight, into the governance of a company in which it has invested billions of dollars.
“We are encouraged by the changes to the OpenAI board,” Microsoft CEO Satya Nadella said in a statement Tuesday night. “We believe this is a first essential step on a path to more stable, well-informed, and effective governance.”
The “initial board” will be chaired by former Salesforce co-CEO Bret Taylor, with former Treasury Secretary Larry Summers as a new addition, along with existing board member Adam D’Angelo, co-founder of Quora.
Independent directors Tasha McCauley and Helen Toner will leave the board. Also departing the board is Ilya Sutskever, OpenAI’s chief scientist, who this week expressed regret for participating in Altman’s removal.
Greg Brockman, OpenAI’s president and former board chair, is returning to his executive role.
Microsoft’s advanced AI research team, which was to be led by Brockman and Altman under a hastily arranged plan announced Sunday night, will be scrapped.
“Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission,” Nadella said. “We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”
Microsoft relies on a combination of its own engineering and OpenAI’s technology for key AI products. Microsoft’s Azure OpenAI service is offering the first tangible glimpse of AI’s revenue potential for the Redmond company.
Given the financial stakes for both companies, look for OpenAI and Microsoft to attempt to convey a sense of normalcy and business as usual to developers and enterprise customers. But the uncertainty of the past week no doubt has some of those customers and partners taking a harder look at alternatives.
That could be an opening for Amazon, Google, Anthropic, and others to exploit.
Amazon Web Services will have a major platform to convey its own message about its AI process and ambitions at its re:Invent conference in Las Vegas next week.
A major wild card is the question of Microsoft’s role on the board. OpenAI’s convoluted corporate structure, with a non-profit board overseeing a capped-profit company (the entity Altman leads and Microsoft invests in), is no doubt complicating matters. OpenAI’s statement said it is “collaborating to figure out the details.”
Nadella said earlier this week that Microsoft would ensure it didn’t get blindsided by the board again if Altman returned to lead OpenAI. However, when pressed by Kara Swisher on the topic, he declined to say whether that would mean having a board seat, a board observer seat, or something else.
The Verge, citing people familiar with the situation, reports that the initial OpenAI board will vet and assemble a larger board of up to nine people, and that Microsoft wants one of those nine seats.
No doubt Taylor and Summers would think twice about surprising Microsoft like their predecessors did, but after the mayhem of the past few days, Microsoft would be wise to get that in writing, at least.
