Microsoft turned one of the most bizarre weekends in modern tech history into one of the most consequential for itself and perhaps the rest of the industry.
With Satya Nadella’s announcement late Sunday that ousted OpenAI CEO Sam Altman and Chairman Greg Brockman will be joining Microsoft, the Redmond company has seemingly squeezed a sweet outcome from what initially appeared to be some sour circumstances for its ambitions in artificial intelligence.
The company is “extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team,” Nadella said in a statement after the OpenAI board and Altman were unable to come to terms on his return. “We look forward to moving quickly to provide them with the resources needed for their success.”
Nadella simultaneously expressed Microsoft’s commitment to its partnership with OpenAI, and said the company looks forward to getting to know newly named interim CEO Emmett Shear and working with its new leadership team.
This part was to be expected. Microsoft has billions of dollars at stake, and OpenAI still has the crown jewel of the industry in GPT-4. But now Microsoft has direct control not only over scarce AI computing resources but also over the precious asset of top talent from one of the world’s leading artificial intelligence labs.
It’s a good thing for Microsoft that Silicon Valley doesn’t believe in non-competes.
With the move, Microsoft also avoids what must have been the harrowing prospect of the former OpenAI leaders and soon-to-be-former OpenAI engineers and scientists joining Amazon or Google, or launching their own startup with the flexibility to partner freely with Microsoft’s biggest cloud and AI rivals.
Yes, Altman and team will theoretically be starting from scratch at Microsoft, but not really, given that they’ll be leveraging their existing relationships at a company with the resources and incentives to support them.
Don’t forget how fast things are moving in artificial intelligence right now. It has been less than a year since Altman and team released ChatGPT.
“We are going to build something new & it will be incredible,” Brockman posted.
No doubt, it will be fascinating to see what they do at Microsoft. They won’t have the constraints of oversight from a non-profit board. That bodes well for Microsoft’s AI products and bottom line, but also raises the question of whether the AI safety concerns that reportedly grew in Altman’s final days at OpenAI were justified.
The next challenge for Nadella and his senior leaders will be avoiding the organizational pitfalls of this hastily arranged induction of Altman, Brockman and their colleagues as new Blue Badges.
Microsoft has lots of experience with dysfunctional integrations over the years, and more recently a few examples of successful ones, which have mostly stemmed from letting the acquired companies keep doing their thing for a while.
As Nadella posted in response to Altman last night, “We’ve learned a lot over the years about how to give founders and innovators space to build independent identities and cultures within Microsoft, including GitHub, Mojang Studios, and LinkedIn, and I’m looking forward to having you do the same.”
Oddly, he did not mention aQuantive or Nokia.
Seriously, there are lots of questions, starting with how the former OpenAI team will complement and work with Microsoft’s existing AI teams. Satya’s Microsoft 365 Copilot is no doubt processing this prompt as we speak.
The Verge reports that Altman will have the title of CEO of Microsoft’s advanced AI research team, a title reserved for the leaders of big Microsoft businesses such as Xbox/Gaming and acquired companies such as LinkedIn and GitHub.
With hundreds of OpenAI employees now threatening to resign unless the board steps down, how long until Microsoft announces a massive write-down of its OpenAI stake? Getting Altman, Brockman, and their former OpenAI employees in the fold might go down as the most successful investment loss in the company’s history.
But if this mess taught us anything, it’s that we have no idea what happens next.