Microsoft’s share price has jumped 2% to A$574 on the news that former CEO Sam Altman is cutting a deal with tech giant that could see most of OpenAI’s staff flee.
While the reason for his removal has not been revealed, insiders believe it may be a power play.
The company also faces questions regarding his replacement, Emmett Shear, who is under fire for alleged resurfaced problematic comments.
Adding to that, the nearly 500 employees have implied that they will resign unless the board reinstates Altman and OpenAI president Greg Brockman – the once promising tech company is floundering.
Throughout negotiations yesterday, CEO Satya Nadella has been seen as decisive and offering steady leadership, which concluded with Nadella announcing both Altman and Brockman would join Microsoft as employees, with Altman managing his own AI group within the company as a CEO.
Microsoft was already significantly invested in OpenAI, due to numerous large investments, but other investors stand to lose if Microsoft absorbs OpenAI.
Despite a potential loss on investment, Microsoft stands to gain massive resources from OpenAI, like the core tech team, at a time when most tech companies are pivoting their businesses to integrate AI in innovative ways.
Currently, Microsoft offers much of the compute infrastructure for OpenAI technology, but if it secures its engineering and strategy of OpenAI leadership minus regulatory obstacles that would have surfaced from acquiring OpenAI, this is a best-case scenario for the tech giant.
Based upon Microsoft’s announcement, Altman, Brockman, GPT-4 lead Jakub Pachocki, former head of preparedness at OpenAI Aleksander Madry, researcher Szymon Sidor, and others will form and manage a Microsoft AI group.
OpenAI chief scientist Ilya Sutskever may not be included in the move, with many theorising he had participated in removing Altman but has since backtracked and expressed remorse on X (Twitter) concerning his actions.
Because everything is moving too quickly, it’s hard to keep up, but Nadella certainly has pleased investors with his leadership.
Additionally, Microsoft has acquired an innovative business at a fraction of its price, and it looks highly unlikely that the tech giant would retract its statement about welcoming Altman and Brockman to the team.
