Microsoft gains board seat at OpenAI following CEO shake up

by Kareem


Kareem is a journalist from the bay area, now living in Florida. His passion for technology and content creation drives are unmatched, driving him to create well-researched articles… read more

OpenAI - Microsoft CEO Satya Nadella - Sam Altman

A little over a weeks ago, OpenAI’s game of CEO musical chairs reverberated throughout the tech world and with the dust settling, it looks like Microsoft was the biggest winner at the end of the day.

The old CEO is the new CEO

According to a new memo from OpenAI’s new initial board, the company has reinstated co-founder Sam Altman as CEO, Mira Murati as returning CTO, and Greg Brockman resuming his duties as company president with the addition of Microsoft retaining a non-voting observer board seat.

The memo follows a couple of tumultuous weeks for OpenAI where co-founder and CEO Sam Altman was removed as CEO as well as former chairman Greg Brockman and Mira Murati was anointed interim CEO status.

Altman and Brockman were immediately welcomed with open arms from Microsoft days later with the company releasing its own statement indicating that the two, along with other OpenAI employees threatening a mass exodus, would be joining the company as part of a new in-house AI business.

Shortly after Microsoft’s bid for Altman and his more than 500 OpenAI devoted employees, the AI company came back to the negotiating table to offer the former CEO his title back.

During Altman’s renegotiations to return to his company OpenAI, it had been rumored that Microsoft was also back channeling for the exact board position it is now being granted.

Microsoft’s new position

When Altman was unceremoniously ousted a little over a week ago, Microsoft, and more importantly its investors, were caught off guard after pledging a continue multi-billion dollar partnership at the AI company’s developer conference days before.

Speaking with tech journalists Kara Swisher on the podcasts Pivot and On with Kara Swisher, Microsoft CEO Satya Nadella expressed the company’s desire to never be caught flat footed with OpenAI again.

One thing, I’ll be very, very clear, is we’re never going to get back into a situation where we get surprised like this, ever again. … That’s done,” 

Microsoft CEO Satya Nadella on On With Kara Swisher

Understandably, Microsoft would like to avoid a repeat situation as well as have a more transparent view into its $10 billion plus investment in OpenAI going forward.

As for who will represent Microsoft’s interest on the board, the OpenAI memo does not identify.

It should also be noted that Microsoft’s non-voting observer role is an intentional appointment that allows the company to skirt regulatory scrutiny as it continues to further ingratiate itself with OpenAI.

As for the OpenAI side of things, the company’s new board will also include former Salesforce CEO Bret Taylor as chairman, and the company’s former Treasury secretary Larry Summers gaining a board seat alongside Quora CEO Adam D’Angelo.

OpenAI’s other co-founder Ilya Sutskever and three other former board remembers have been removed from their board seats as a result of the new make up.

Altman, who seems appreciative of Microsoft’s continued backing made it a point to highlight its support.

“They’ve had our backs and were ready to welcome all of us if we couldn’t achieve our primary goal. We clearly made the right choice to partner with Microsoft and I’m excited that our new board will include them as a non-voting observer. Thank you.”

OpenAI CEO Sam Altman

OpenAI’s future governance

Going forward the new board plans to adhere to a new governance structure to avoid a repeat of the past week but the current memo lack any details on what that new structure is, or how it will be different from the past one.

Altman’s ousting was followed by a memo from former board members that read

Altma“Team – after yesterday’s announcement, which took us all by surprise, we have had multiple conversations with the board to try to better understand the reasons and process behind their decision. These discussions, and options regarding our path forward, are ongoing this morning.

We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices. This was a breakdown in communication between Sam and the board. Our position as a company remains extremely strong, and Microsoft remains fully committed to our partnership.

Mira has our full support as CEO. We still share your concerns about how the process has been handled, are working to resolve the situation, and will provide updates as we’re able.

I’m sure you all are feeling confusion, sadness, and perhaps some fear. We are fully focused on handling this, pushing toward resolution and clarity, and getting back to work. Our collective responsibility right now is to our teammates, partners, users, customers, and the broader world who shares our vision of broadly beneficial AGI. Hang in there, we are behind you all 1000%.”

Former OpenAI Board

Altman addressed the previous memo with “there were real misunderstandings between me and members of the board,” which has led many to speculate that OpenAI’s dual non-profit and for profit businesses were not exactly aligned as desired.

With Altman back in the driver seat and Microsoft ridding shotgun, we may see a governance structure a bit more attuned towards for-profit expenditures and endeavors going forward.

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