The last few days have been chaotic for the AI industry, with technology experts pondering what this could mean for the emerging sector and some of its key players.
OpenAI, the company behind ChatGPT, which brought artificial intelligence into the mainstream late last year, announced Friday that it had removed its CEO Sam Altman and appointed its technology chief Mira Murati as interim CEO in his place.
But before the weekend was over, OpenAI appeared to change course, announcing that former Twitch boss Emmett Shear would replace Altman instead, at least temporarily.
Ilya Sutskever, one of the OpenAI board members involved in Altman’s ouster, said he “deeply regrets” his role in the board’s actions. Sutskever “never intended to harm OpenAI” and will work to “reunify the company,” he said on a social network post Monday.
Meanwhile, Altman himself has already found a new role leading a new advanced AI research team at Microsoft, where he will be joined by former OpenAI CEO Greg Brockman and several other employees.
However, according to Richard Windsor, founder of digital research firm Radio Free Mobile, Altman’s move could simply be a case of “damage control” for Microsoft. This is due to Microsoft’s huge investments in OpenAI, he said on Monday on CNBC’s “Street Signs Europe”.
Microsoft did not immediately respond to CNBC’s request for comment on the statement.
Microsoft began investing in OpenAI back in 2019, initially with around $1 billion. That number has since increased to an amount reportedly closer to $13 billion. Microsoft has also integrated OpenAI’s technologies into products such as the Bing search engine and various other software.
“A lot of that value is embedded in the company’s founders and engineers,” Windsor said.
Rishi Jaluria, managing director of software equity research at RBC Capital Markets, told CNBC’s “Street Signs Asia” on Monday that Altman is aligned with Microsoft’s AI vision.
“The vision that Sam Altman has is in some ways the vision that Microsoft wants,” including commercialization and “responsible AI, but not the definition of AI,” he said.
Meanwhile, other technology experts are supporting Microsoft CEO Satya Nadella’s quick move to hire Altman internally.
OpenAI’s four-person board sat at the kids’ poker table thinking they had won until Nadella and Microsoft came out on top in a World Series of Poker play for the ages, leaving the Valley and Wall Street white-knuckled Sunday night/Monday “Wedbush Securities tech analyst Dan Ives wrote in a note published Monday.
“We actually see Microsoft in a STRONGER position now from an AI perspective with MSFT’s Altman and Brockman doing AI,” he added.
Aaron Levie, CEO of cloud sharing and management company Box, said via
Aviral Bhatnagar, an investor at Venture Highway, had a similar view.
“You now understand why Satya Nadella is one of the greatest tech CEOs of this generation,” he said in one post on X
Former OpenAI CEO Sam Altman and Microsoft CEO Satya Nadella at OpenAI’s DevDay on November 6, 2023 in San Francisco.
Hayden Field | CNBC
“Kept Altman in check, kept the transition as clean as possible, managed the chaos and wild decision-making, and didn’t destroy OpenAI. What a boss move.”
Windsor suggested that other OpenAI employees could soon follow Altman to Microsoft, which he said could have detrimental consequences for OpenAI. This could even include OpenAI tech chief Murati, who was instrumental in the development of OpenAI products, he noted.
“If she goes to Microsoft with Sam and the others, what will be left of OpenAI? Probably not much more,” Windsor said.
Several OpenAI employees also shared Comments on X, often pointing out that people are crucial to the company. Reports also emerged Monday of hundreds of remaining OpenAI employees saying they would follow Altman to Microsoft if OpenAI’s board doesn’t resign.
The relationship between OpenAI and Microsoft could also shift due to the developments, said Jaluria.
“The OpenAI relationship is absolutely critical to Microsoft and I think many of us were surprised that Microsoft didn’t have a seat on the board despite all the investment. And I wouldn’t be surprised if Microsoft came out of this situation.” “We have more say here and more control over fate because their fate in AI is absolutely tied to OpenAI,” he said.
“While I believe there will be some changes as a result, ultimately Microsoft and OpenAI will be very important partners in the future,” he added.
The chaotic developments were also criticized by Shear himself, OpenAI’s new interim CEO.
“It is clear that the process and communication surrounding Sam’s removal was very poorly handled, which has seriously damaged our trust,” he said in one post on X, in which he also confirmed that he would be stepping in as interim CEO.
Shear suggested launching an investigation to examine the process that led to the recent events and producing a report on it within his first 30 days at OpenAI.
This was confirmed by experts, including Windsor, who said the situation could seriously damage the company’s reputation and undermine public trust in the company.
Meanwhile, Wedbush Securities’ Ives branded the weekend’s developments a “circus clown show” and described it as an “attempted coup” that promoted Shear to interim CEO, “a move that will forever be viewed as a dirty move by OpenAI.” Has caused chaos internally and externally.”
Elsewhere, Nathan Benaich, general partner at Air Street Capital, added that the events showed “that no one is immune from the laws of corporate physics” and “one bad decision” can have enormous consequences.
“Given Sam’s centrality to OpenAI’s vision and the personal loyalty he enjoys, this is the most confusing decision by an AI lab I have ever experienced,” he said.
OpenAI did not immediately respond to CNBC when asked for a response to these comments.
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