Microsoft announces that OpenAI founders Sam Altman and Greg Brockman will join, what impact will they bring?

OpenAI Split, Microsoft Must Absorb the Team

This means that OpenAI is going to split up, and Sam and Greg will definitely take away a large number of technical personnel.

Ilya just responded for the first time (switch to a picture of Sam’s response, it’s 5 am, looks like it’s been a difficult night):

Mira has already taken the lead: Leaving the team, OpenAI means nothing. (After a preliminary count, more than 30 people have said this to take sides)

Greg directly named several core developers:

Before this news came out, I posted an idea:

With Sam going back to OpenAI and the talks breaking down, Ilya insisted on not letting him serve as CEO again, and replaced Mira, who had just served as interim CEO for two days, with Twitch co-founder Emmett Shear. More OpenAI employees have expressed their intention to resign - other AI companies are happy about this and are waiting to recruit them. Perhaps we will see OpenAI split again (the last time was anthropic), maybe OpenAI’s fall will help more AI companies.

If Microsoft doesn’t act now, the technical personnel will be poached by Google.

So Microsoft must do this now, they must control the next generation of GPT in their own hands, to ensure the implementation of their AI strategy. So instead of letting Sam and Greg establish themselves independently again, adding another “stepchild” that requires investment or a competitor to compete with, it is better to directly absorb the team that left OpenAI.

I have always felt that Microsoft’s investment in OpenAI is a very wise move:

Microsoft’s investment in OpenAI is definitely a stroke of genius. Microsoft’s investments don’t always make money, but this move by OpenAI is definitely a win. If you hand OpenAI over to someone else, with the same conversational ability, they won’t be able to create such a product. What about cross-application operations? Who has a complete lineup of Microsoft’s commercial products? Solutions??? Office Suite, Outlook, development, communication… an all-in-one solution. Give it to someone else, do they have such a complete product line? Do they have such a wide range of coverage? Do they have such deep integration and binding of underlying tools? APIs are APIs, B2B is B2B, and our own products are our own products. Why doesn’t OpenAI first look for cooperation with WPS? Is Kingsoft not willing? Microsoft’s entire business layout has been revitalized by this stroke of genius. 1+1 is not just greater than 2, but directly 1+1+1+…=2^n, unimaginable. This is the power of integration.

Now in retrospect, this may be a mistake for Microsoft - being tied to the OpenAI war chariot and not having their own AI research. If Sam can return to OpenAI, Microsoft must also compete for a seat on the board of directors.

Since the talks have broken down, Microsoft is now facing its last chance and they must seize it.

In fact, this outcome is acceptable for Microsoft, but it will inevitably suffer heavy losses - how to balance the relationship between OpenAI and internal research and where OpenAI will go in the future, there are variables in all of these. Wait to see Microsoft’s stock price tomorrow and you’ll know how much confidence everyone has in Sam.

But I am more optimistic, even if Microsoft temporarily can’t produce GPT-5, their overall Copilot strategy is definitely going to have a qualitative leap. Microsoft’s product deployment capabilities are definitely much stronger than ChatGPT, and the concept of LUI will also be realized faster, so that AI products can quickly benefit the general public.

So Microsoft’s path is probably an easy one, but the future of OpenAI is more uncertain.

Looking at the positive side, OpenAI will return to being a non-profit organization, leaving some AI idealists to work on AGI and handing over the monetization of products to Microsoft. Sam has great influence on both sides, so it is not impossible for him to once again control both Microsoft and OAI.

That’s all.

Final Episode of the OpenAI Power Struggle

The grand finale of the OpenAI power struggle unfolds:

Negotiations with the board collapse, Ultraman joins Microsoft!

Both sides have officially announced:

This news has shocked everyone, completely shocked!

This is too crazy, hope everyone is still okay.

After a whole weekend of negotiations, no one expected Ultraman to actually fail in his return to OpenAI, especially since many executives and investors, including the interim CEO, were pressuring the board.

Even more unexpected was Ultraman’s swift embrace of Microsoft after leaving his own founding company.

So, congratulations are in order for Ultraman:

Congratulations to Microsoft as well:

It’s like the end of the whole story, and Microsoft wins big.

Microsoft is back in the game.

Indeed, as netizens have pointed out, Microsoft is now not only the largest investor in OpenAI, but also has its former CEO and all the OpenAI employees who wanted to leave with him (Microsoft has promised to include them), making it incredibly powerful.

So, how did things escalate to such a dramatic point?

OpenAI Insists on Removing Ultraman, Chooses a New CEO

Let’s start with the negotiations from the weekend.

On Sunday noon local time, Ultraman and (former) President Brockman went to OpenAI headquarters.

Of course, they went as visitors.

Ultraman reportedly made two demands:

First, dissolve the board of directors, and second, release a statement “exonerating Ultraman from any wrongdoing.”

However, the board reportedly refused to formally resign, even though they had previously agreed in principle to do so under pressure.

On the other side, Interim CEO Mira Murati had plans to rehire Ultraman and (former) President Brockman back into the company, although their positions were uncertain.

Besides Mira, CSO (Chief Strategy Officer) Jason Kwon and COO (Chief Operating Officer) Brad Lightcap were also on Ultraman’s side.

There were even rumors that they were looking for new board members: including the possibility of choosing Bret Taylor, former co-CEO of Salesforce, and an executive from Microsoft to join the board.

Nadella, who supported Ultraman, was the lead negotiator, but overall, the situation remained at a stalemate.

Insiders claimed that a final solution would be reached soon (the deadline set for the board was 5:00 pm that day).

Unexpectedly, the news broke that the negotiations had failed! The board rejected Ultraman’s demands and swiftly found a new interim CEO within two days: Emmett Shear, co-founder of the game streaming platform Twitch.

Board member Ilya, who was rumored to be the “instigator” behind the whole firing incident (according to leaked information from foreign reporters), confirmed to the employees:

Despite the efforts of the company’s executives to bring back Ultraman as CEO, he will not be returning.

Upon hearing this news, dozens of OpenAI employees announced their resignation in anger.

Even netizens couldn’t believe it:

Pessimistic individuals even believed:

OpenAI will never recover from this incident.

Founder Andrej Karpathy expressed his dissatisfaction with a radiation warning sign:

Not even Google’s Jeff Dean could sit still:

This event truly shocked the entire tech industry.

However, within three hours, as the Atlantic was about to enter the midnight hour, Ultraman and the CEO of Microsoft dropped another bombshell.

Everyone’s emotions were left in suspense.

According to reports, after joining Microsoft, Ultraman will lead a new AI team within the company, alongside Brockman, with Ultraman as the CEO.

Microsoft promised to quickly provide them with the necessary resources for success.

As for the collaboration between Microsoft and OpenAI, Nadella stated that it would continue and expressed full confidence in it.

The Public Once Thought Ultraman Would Return

The decision of the OpenAI board shocked everyone because it was not only the investors (including Microsoft), company executives, but also internal employees and netizens who expressed widespread support for Ultraman online.

Around noon yesterday, shortly after news emerged that the board would reopen negotiations, Ultraman tweeted a cryptic message: “i love the openai team so much,” starting an extraordinary “heart-reply movement” that was so overwhelming it couldn’t be captured in a screenshot.

The respondents included a large number of OpenAI employees, including interim CEO Mira:

And (former) President Brockman also responded:

The entire operation left everyone stunned, as the OpenAI board seemed to be directly isolated and engaged in a “fighting alone” situation.

At the same time, the internet was filled with exciting speculations:

Is Ultraman making a comeback?

However, it’s worth noting that in this situation, most members of the OpenAI Super Alignment Department remained silent during this heart-reply support movement.

The department’s responsibility is simply to prevent AI from going out of control, and one of its leaders happens to be Ilya, who is rumored to be the main figure behind the firing incident.

Many people must be perplexed by the board’s decision to repeatedly insist on removing Ultraman under various pressures.

Earlier, some netizens even said: If the OpenAI board was truly dissatisfied with Ultraman’s excessive focus on commercial aspects and wanted to fight for AI safety, there were a million ways to do so without causing such a turmoil.

Interestingly, it seems that the OpenAI board had Elon Musk’s support.

Just before this latest outcome came out, Musk stated:

Ilya has a strong moral compass and is not power-hungry. He wouldn’t take such drastic action (i.e., firing Ultraman) unless he believed it was absolutely necessary.

What exactly constitutes this “necessity” remains to be seen in further revelations.

And another night later, OpenAI will face its first Monday after this massive “coup.”

What will the company’s employees feel at that time?

Like this?

One thing for sure is that the meme circulating online won’t come true.

Who is the New CEO of OpenAI?

Speaking of which, who is the new CEO, Emmett Shear?

According to information available:

Emmett Shear was born in 1983 (two years older than Ultraman) and graduated from Yale University with a degree in computer science.

He is the co-founder of the video streaming platform (founded in 2006) and was the CEO of Twitch until March of this year.

Twitch was founded in 2011 as a spin-off from another streaming platform and was acquired by Amazon for $970 million within three years. The platform has grown to have 8 million streamers per month. It’s worth mentioning that Emmett Shear was also a part-time partner at Y Combinator from June 2011 to June 2016.

Ultraman, on the other hand, served as the leader of Y Combinator from 2014 to 2019.

Lastly, are people satisfied with this outcome?

Will the future fate of OpenAI and Microsoft change? Please feel free to share your thoughts in the comments section.

Father of ChatGPT Excluded by Capital

Netizen: “Father of ChatGPT has been excluded by capital”

Truth: “Father of ChatGPT excluded capital”

Ilya is the father of ChatGPT and Sam is the capitalist

It is already very difficult for Ilya to tolerate Sam for so long.

Tags belonging to Ilya: Hinton’s disciple, author of Seq2Seq, AlexNet, AlphaGo, GPT-1, GPT-2, GPT-3, CLIP, and other models.

Tags belonging to Sam: Dropped out of computer school after one year, Jewish, homosexual, founder of a social media company, founder of an investment institution, cryptocurrency issuance.

Ilya came from Google Brain to the non-profit company OpenAI with vision and passion. For the past 8 years, he has been promoting the development of AGI step by step. GPT has influenced Bert, and CLIP has influenced Stable Diffusion. And then, the father of ChatGPT became Sam? OpenAI turned into a for-profit institution? OpenAI started to issue a world coin to fleece investors?

Did Ilya come to OpenAI to promote Sam? Did he come to work for Microsoft? Did he come to endorse Sam’s world coin and fleece investors?

Let’s emphasize again the nature of OpenAI. Sam and Ilya are not boss and programmer. OpenAI consists of two parts. One part is led by Musk and includes Peter, Sam, and others, which represents the capital side. The other part is led by Ilya and includes Alec, Greg, and others, which represents the technical side. The original vision was to “achieve safe artificial general intelligence that benefits humanity.” Musk withdrew due to conflicts with Tesla, and Peter, probably busy with a wide range of investments, took on the role of fund management, which resulted in Sam cleverly turning OpenAI into CloseAI. He designed rules that allowed him, as an early investor, to make 100 times the profit and exit. At the same time, he ran various shops to sell services and issued coins to fleece investors. OpenAI gradually became a technical outsourcing company for Microsoft. It’s fascinating.

Of course, most of the lower-level employees support Sam. Who would want to miss this rare opportunity to get rich? But who is Ilya? He had already achieved financial freedom by selling an empty company to Google when he hadn’t even graduated, along with his teacher Hinton and his senior brother Alex. Is the current state of OpenAI what Ilya wanted?

Originally, OpenAI was not a united group with a common goal. Now, Sam and Greg, who want to make money, can tear off the fig leaf of the nonprofit organization and wholeheartedly join Microsoft, their main sponsor. Meanwhile, Ilya and others, who want to “achieve safe AGI that benefits humanity,” can continue their own careers. It can be said that both sides win.

(Ilya and Alec are authors of GPT-1, GPT-2, and GPT-3 papers, and considering Ilya’s dedication to AGI for over a decade, there is no doubt that Ilya is the father of ChatGPT. Sam probably cannot understand the papers and code of GPT.)

——– Additional

To those who compare Sam with Steve Jobs and Jack Ma, it is actually not apt because Jobs and Ma started successful commercial companies from scratch, while Sam managed a non-profit technology company and turned it into a for-profit company. He managed to gain both fame and fortune. His behavior is more similar to another entrepreneur - Liu Chuanzhi, who doesn’t understand technology but made significant profits by privatizing state-owned enterprises and even became a pioneer of entrepreneurship.

There are also many comments saying that without Sam, OpenAI would not have money and ChatGPT would not have been created. This logic is flawed. Firstly, when one person creates a lithography machine and another person sells it for one billion, is it difficult? I could even help sell it for a higher price. Secondly, there are many financing channels in the United States. If one wants money, there are foundations for fundraising, crowdfunding donations, national scientific funds, and even the possibility of going public without profitability. Thirdly, according to the revelations of Microsoft mid-level executives on Blind, in 2021, OpenAI wanted to migrate its training platform from Azure to Google Cloud because Google is cheaper. Microsoft wanted to retain this big customer, so when the CTO visited OpenAI and saw the early version of ChatGPT, he was amazed and advised Nadella to increase the investment. This indicates two things: firstly, it was not the case that Sam went to Microsoft for investment because OpenAI was in dire straits, but rather Microsoft voluntarily increased its investment after seeing the demo; secondly, before that, they had already developed a ChatGPT demo that amazed the Microsoft CTO. So, the claim that without Sam, there would be no money and no ChatGPT does not hold true (although Microsoft had invested in OpenAI in 2019, there were still many venture capital companies including Tiger Global Management, Sequoia Capital, Andreessen Horowitz, Thrive, and K2 Global. Microsoft obtained exclusive licensing rights for GPT-3 in 2021 and started controlling the company with 10 billion in 2023, and Sam promised a return of over 90 billion to Microsoft).

Microsoft’s investment in OpenAI, the era of AI supremacy will come to an end

Does this mean that Microsoft’s stock price will rise? The era of AI supremacy will indeed come to an end, and this is no joke—it’s all because of money!

The emergence of ChatGPT is due to Microsoft providing OpenAI with a lot of resources, including money. Large AI models are just too costly. OpenAI initially started as a non-profit organization, OpenAI Inc., and the money of non-profit organizations mainly comes from donations, which you may have seen in some open-source software. However, AI is truly burning a hole in the pockets, so they later established a profit-making subsidiary called OpenAI Globall, LLC. Microsoft invested $13 billion in this subsidiary (not all at once, and probably not anymore), but they don’t even have a seat on the board of directors.

Without commercialization, there won’t be enough money, and without enough money, AI won’t be able to maintain its lead.

After Sam Altman was fired, the President of OpenAI, Greg Brockman, also chose to resign, and there were rumors of other members resigning as well. Now that they’ve joined Microsoft, the following may happen:

• OpenAI’s market value will shrink by 70%, while Sam/Greg joining Microsoft will likely cause an increase in the value of Microsoft.
• Anthropic’s market value will rise by 50% to $30 billion.
• It will significantly broaden the market value space of other infrastructure LLM companies, from $10 billion to $40 billion.

Image from SWYX, recommended for following.

Image from SWYX, recommended for following.

Microsoft acquires OpenAI and recruits employees

Is Microsoft the biggest winner?

On the one hand, by integrating OpenAI into Microsoft, it is reasonable to assume that at least a large portion, if not all, of the highly regarded employees will join Microsoft. What about the employees who are not highly regarded? In any case, building the framework of a new AI department at Microsoft should not be too difficult.

Furthermore, Microsoft will maintain its partnership with OpenAI and remain its largest investor.

Moreover, who knows if this is the best outcome that Microsoft has calmly concluded?

Suppose that the previous development unfolded as previously speculated, with Nadella supporting Ultraman’s return to OpenAI. In that case, it is highly likely that there will be a departure between Ilya and Ultraman, in other words, someone will leave to join another company. Does Microsoft want to witness such a scene? Initially, Microsoft might not have reacted when the news of Ultraman’s dismissal from OpenAI broke, and they might have been in shock and anger. However, the difficulties in the negotiations allowed Microsoft to calm down and ultimately propose what may be the best possible outcome under the current circumstances, especially for Microsoft.

Microsoft now possesses two equally important divisions: one responsible for commercialization and the other focusing on technology and ethics. Microsoft will have a greater space to make choices.

OpenAI personnel may defect to Microsoft

“Saturday fired, Sunday reconciled, Monday went back to work.” Originally, everyone thought Sam Altman would follow the script of Steve Jobs. Unexpectedly, the plot reversed so quickly. In the blink of an eye, he joined Microsoft, and the genius midlife crisis was non-existent.

Anyway, this group made the domestic large-scale models happy. Originally thought that with the disintegration of OpenAI, it would be an opportunity to poach a few people, but now it seems that there is a high probability that OpenAI personnel will collectively defect to Microsoft.

Distrust in Altman and Microsoft, Concerns about the Development and Safety of AI

I have a certain intuition of distrust towards Altman.

I am particularly skeptical of Microsoft’s development capabilities. Ilya is probably right that AI as a field requires more dedicated organizations to pursue it.

If anyone can maximize the security of AI, it must be an open-source, neutral, non-profit organization that is not solely focused on “reducing fine losses” like commercial entities.

I hope that openAI, which is getting back on track, can surpass these profit-driven actors and performers who are only concerned with stock prices and profits.

Many people think that AI is a competition between different business giants, but they fail to realize that the real competition occurs between the public and private sectors.

The final victory of private enterprises will either directly lead to a thorough reform of the patent and intellectual property rights system, or it will plunge humanity into great danger. The best solution is for non-profit, public organizations to win.

This is only one aspect of the problem.

On the other hand, the creative nature of openAI is likely connected to its idealistic essence, which Altman and Microsoft do not offer.

The prospects for the reorganized “Microsoft AI team” may not be as bright as one would expect. There is a reason why Microsoft hasn’t produced anything groundbreaking in so many years.

Microsoft Establishes New AI Team

Let’s start with the conclusion: The old ginger is still spicy. From the sudden dismissal of Altman on Friday, which may have caused Microsoft’s stock price to plummet, to Altman’s return to negotiate with OpenAI over the weekend, and then to Ilya’s sudden change of heart and immediate hiring of Altman to join Microsoft, it is estimated that Microsoft’s stock will rise tonight before the market opens. Nadella is truly turning the tide.

(Chaos is a ladder, and a thumbs-up from the little finger)

---

Everything is in chaos.

• Altman was fired last Friday

• Although the beautiful CTO Mira was appointed as interim CEO, she sided with Altman

• A deal was made over the weekend for Altman to return to negotiate with OpenAI (possibly facilitated by Mira). Altman himself was quite proud, taking a selfie and making a tough statement: “This is the first and last time I will wear this visitor badge."

(Somewhat amusingly, someone secretly recorded this scene)

• It was expected that his return was a done deal, with a PST deadline set for 5:00 PM and Ilya being impolite, continuously dragging it out and not providing a response

• Then, a bombshell was dropped, appointing Twitch’s founder, Emmett Shear, as CEO

(Comment from netizens: OpenAI is like a remake version of Nolan’s film featuring Al Pacino)

(At this point, Ilya probably thought he was very cool, just like when Lao Bai took down Colonel Sanders)

(But to accuse Ilya, who had a good hand, of playing poorly, Lao Bai’s bodyguard blamed him for being too ruthless)

• And just now, another bombshell was revealed. Microsoft’s Nadella announced that Altman, GDB, and the OpenAI employees who resigned will join Microsoft to establish a new AI research team. The operation mode will be similar to GitHub and LinkedIn. They will be given sufficient money and resources to work independently.

(Old Na played a reverse card and won the game)

(At this point, Google is probably laughing out loud, classic laughter from our fellow countrymen)

It’s worth noting that when these news were released, it was already late at night in the United States, but everyone was staying up and relentlessly refreshing their feeds. Various memes and images were flooding in and couldn’t be consumed quickly enough.

(Tonight, everything is in chaos. I’m done with you, do as you please)

OpenAI: The Power Struggle

Synopsis: This is a drama about ideals, betrayal, revenge, and redemption, revolving around the power struggle and ethical challenges within OpenAI, a cutting-edge technology company in the field of artificial intelligence.

Character Setting:

Sam Altman: Former CEO of OpenAI, forced to resign. An idealistic and passionate dreamer, but also a resolute reformer.

Mira Murati: Ambitious interim CEO with her own plans, unafraid to challenge the powerful board of directors.

Ilya Sutskever: Chief scientist of OpenAI, a power player with strong personal beliefs, played a crucial role in Altman’s dismissal.

Greg Brockman: Former president loyal to Altman, his departure implies an impending crisis.

Investors: A group of formidable investors including Microsoft, who push the agenda behind the scenes.

Act 1: The Struggle for the Throne

Altman is unexpectedly fired by the board of directors, shocking the entire tech industry, especially considering his transformation of the company from a nonprofit organization into a corporate giant.

The power struggle within the board of directors and the contest for the future direction of artificial intelligence are exposed.

Act 2: Undercurrents

Employees feel uneasy after Altman’s departure, causing internal divisions.

Investors' dissatisfaction grows, angry at Altman’s resignation and demanding the collective resignation of the board of directors.

Murati plans in secret, intending to restructure the board of directors and regain power.

Act 3: The Game of Power

Investors launch a public relations battle, attempting to rally public support for Altman’s reinstatement.

Murati secretly meets with Altman and Brockman, proposing a plan for their return, but with the condition of securing a new and more powerful position for them within the board of directors.

Act 4: Reversal of Fortune

Through a series of strategic maneuvers and public relations activities, Altman and Brockman’s reinstatement becomes public, causing shockwaves within the board of directors.

In a tense board voting, Murati successfully seizes power and reorganizes the company’s top leadership structure.

Act 5: The New Order

After a series of internal conflicts, the company launches a revolutionary new product, reestablishing its leading position in the market.

Altman and Murati publicly announce that they will lead the company into a new era, focusing on the development of safe and ethical artificial intelligence.

Ultimately, former enemies become allies, jointly facing new challenges from the outside world, working together for the future of humanity and technology.

Climax:

A scandal triggered by leaks and betrayals almost destroys the company’s reputation and market position.

A series of legal and public relations battles jeopardizes the company’s image in the public eye.

Ending (Bright Version):

After experiencing a series of crises and challenges, OpenAI presents an unprecedented unity and clear vision. Altman and Murati make a passionate joint appearance in a global live broadcast, announcing the company’s new direction and commitment to the future of artificial intelligence.

The internal power structure of the company is reshaped, with a new governance framework based on transparency and accountability, rebuilding trust among employees and the public.

In the final scene of the series, we see Altman and Murati attending a large international AI ethics conference together. Their speeches inspire a new global discourse on the safety and ethical development of artificial intelligence.

Ending (Tragic Version):

OpenAI becomes a cautionary tale, demonstrating that even the most cutting-edge technology companies can collapse due to internal power struggles and external market pressures.

The last scene of the story is an empty office, where once bustling activity now only a few people remain, tidying up. On the wall hang photos of Altman and Murati, seemingly recounting the past glory.

In this pessimistic ending, OpenAI’s dreams and ideals are shattered by the harsh reality, leaving the audience with a profound reflection on technological development and the choices of humanity.

The consequences of Microsoft’s power struggle with OpenAI may lead to a reassessment of their partnership.

Microsoft not only acquired the departing core team but also regained the dominant power in its collaboration with OpenAI.

Author | Xiaofu Editor | Zheng Xuan

The highly anticipated power struggle at OpenAI has come to an end, with unexpected twists and turns.

Founder and CEO Sam Altman lost the battle—on November 17, the board, led by Chief Scientist Ilya Sutskever, expelled him from the company. Over the next two days, Altman returned to the company headquarters and engaged in negotiations with the board, with the support of numerous employees and company investors. He hoped to regain the position of CEO at OpenAI and restructure the board.

However, these efforts failed. According to foreign reports, after a whole weekend of negotiations, Ilya announced that Altman would not return. The position of CEO at OpenAI will be taken over by Emmett Shear, co-founder of the video streaming website Twitch.

The defeated Altman decided to join Microsoft—the company is OpenAI’s most important investor (providing $10 billion in funding), the most important provider of computing power, and also a staunch supporter of Altman. Satya Nadella, Chairman and CEO of Microsoft, announced this news on Twitter.

Nadella stated that Altman, along with Greg Brockman (former President and board member of OpenAI, who announced his resignation after being removed from the board), and their colleagues will join Microsoft to lead a new advanced AI research team.

Regarding OpenAI, Nadella stated that Microsoft remains committed to its partnership with OpenAI. He looks forward to learning about Emmett Shear and OpenAI’s new leadership team and working with them.

In just a few sentences, the entire commercial landscape of AI in the world may be reshuffled. After this battle, OpenAI may lose its position as the absolute leader of this wave of artificial intelligence—not only losing its key figure, Altman, but also almost coming into conflict with Microsoft, the giant that controls its computing power and financial lifeline.

OpenAI employees seemed to anticipate this fate. According to foreign reports, after Ilya announced this news, dozens of OpenAI employees announced that they would leave the company. Currently, OpenAI has more than 700 employees. Although many AI companies have actively recruited OpenAI employees in the past two days, Microsoft is likely their most probable destination.

For Microsoft, the power struggle at OpenAI, especially Altman’s departure, was an unexpected and unwelcome result. With this situation, it can only choose to support Altman—the potential crisis it brings is that Microsoft may have to negotiate between the OpenAI team, which has already invested huge resources over the past few years, and the Altman team that has joined internally. This can lead to waste of resources and funds.

But no matter who wins, Microsoft may not be the loser. After announcing that Altman and others would join, Microsoft’s stock price rose 2.5% in pre-market trading.

As this unexpected power struggle draws to a close, a new AI competition landscape led by OpenAI and Microsoft has just begun.

01

How Altman Was Expelled by His Own Organization

The reasons for the breakdown of the negotiations are currently undisclosed. However, a basic judgment can be made that this is still related to OpenAI’s governance structure. In other words, Altman and his internal employees and investors were unable to overcome the power of the board.

OpenAI has a relatively unique corporate governance structure. Most technology companies have the CEO reporting to the board composed of investor representatives, with higher voting rights and the ability to determine corporate governance. But OpenAI is not like this.

Its board members do not include investors—Altman, Greg, and Ilya, the three management members, hold three seats on the board. External members (Adam D’Angelo, CEO of Quora; technology entrepreneur Tasha McCauley; and Helen Toner from the Center for Security and Emerging Technology at Georgetown University) hold the remaining three seats—when Ilya joins the other three external members, they can vote to expel Altman and Greg.

As for why OpenAI wants external members to serve on its board, it is rooted in OpenAI’s positioning as a non-profit organization.

At the end of 2015, Altman, then the well-known chairman of Silicon Valley incubator Y Combinator, and Elon Musk, Reid Hoffman, and others co-founded OpenAI. The latter’s mission is to ensure that “artificial general intelligence benefits all of humanity.” Ilya was attracted to this vision and decided to join.

However, in 2018, Musk, who had shifted his focus to Tesla and SpaceX, announced his withdrawal from OpenAI and suspended his financial support—for training OpenAI, which burns tens of millions of dollars annually, new sources of funding had to be found. In 2019, Altman established a profit-capped profit entity, OpenAI LP, to attract external investors for OpenAI. That year, OpenAI received funding from Microsoft.

But to ensure that OpenAI remains a non-profit organization, Altman stipulated that the profit entity, OpenAI LP, must comply with the board of the non-profit entity, OpenAI, Inc. Only the board members who do not hold shares in the non-profit entity have voting rights.

In short, this is an organization controlled by a “non-profit” entity and “non-affiliated” board members—it aims not to create investment returns, but to “build and adopt safety-conscious AGI (artificial general intelligence) that benefits all of humanity."

This unique governance structure of OpenAI, Source: OpenAI

The reason why the board, represented by Ilya, expelled Altman is that they believe he is working against this goal.

According to Musk’s statement in this incident, Ilya is a person with a good moral sense and not someone who pursues power. “He would never take such radical actions unless he thought it was absolutely necessary,” Musk said. Ilya has always been cautious about the capabilities of artificial intelligence. In July of this year, he led the establishment of the “Alignment Project” to control artificial intelligence by having it act in accordance with human values.

According to various foreign media reports, the dissatisfaction of the board, represented by Ilya, with Altman lies in the fact that Altman’s actions were too swift. Whether it was the acceleration of an “arms race” with major technology giants to usher in AGI, or the grand commercial plans announced at the developer conference just over ten days ago, such as the “GPTs Store”, all raised concerns about the safety of the technology and the non-profit nature of the organization.

Altman’s departure was explained in the official announcement by OpenAI as follows: The lack of consistent and candid communication with the board hindered its ability to fulfill its duties, and the board no longer believed in Altman’s ability to lead OpenAI. At a subsequent all-staff meeting, Ilya disagreed with the allegations of a “coup.” He believed that it was the responsibility of the board to fulfill the mission of the non-profit organization, “which is to ensure that OpenAI builds AGI that benefits all of humanity.”

After being expelled, Altman and his supporters proposed various negotiation conditions—according to media reports, whether it was proposing to compose a new board with several well-known executives or the possibility of Microsoft promoting the establishment of a potential board observer seat—all of this conflicted with the non-profit positioning and original governance structure of the company, and ultimately, no agreement could be reached with Ilya and other former board members.

If OpenAI is viewed as a company, the expulsion of the founder proves that its governance structure is quite problematic. However, if OpenAI is viewed as a non-profit organization, it remains within the legal framework to expel a founder it deems inconsistent with its mission, which demonstrates that it is indeed a non-profit organization that has not strayed from its original intentions. It all depends on how one sees it.

When Altman founded OpenAI in 2015, he told Vanity Fair that he had little experience with non-profit organizations and was not sure how things would develop. And according to a federal tax filing, OpenAI warned investors on the cover of key documents that “it is wise to view any investment in OpenAI as a donation.”

02

Where Do OpenAI and Microsoft Go From Here?

With Altman’s departure settled, new issues are starting to arise: What will happen to the “golden combination” of OpenAI and Microsoft in the era of large models after this drama?

According to previous media reports, Microsoft, as OpenAI’s largest investor, received news of Altman’s dismissal from the board less than “10 minutes” before it was announced. Moreover, Microsoft, led by Altman and Greg, is believed to be the main force behind pushing for their return to OpenAI in the past 48 hours.

Shortly after everything settled, Nadella also tweeted through the X platform, officially announcing that Altman, Greg, and some OpenAI colleagues would join Microsoft, while extending an olive branch to the new management team at OpenAI, expressing his expectation for future cooperation with them.

However, with the internal upheaval at OpenAI, it is uncertain whether the two parties can return to the close collaboration they had before.

The collaboration between OpenAI and Microsoft, in simple terms, involves Microsoft providing funding and computing power support for OpenAI’s operations and large-scale model training, while Microsoft utilizes OpenAI’s large-scale models and other technological capabilities to provide Azure cloud services to customers or develop software products and services such as Copilot and New Bing.

But as OpenAI expands from model training to launching products like ChatGPT and develops a plugin ecosystem, OpenAI has shown signs of competition with Microsoft in some areas. Additionally, Microsoft’s enterprise-level cloud services have competed with OpenAI.

Previously, GeekPark reported that there were hidden currents beneath the seemingly close collaboration between OpenAI and Microsoft, including OpenAI’s restriction on providing the most advanced large models to Microsoft and Microsoft training sales representatives to compete with OpenAI for clients.

However, as long as the overall direction is aligned, these short-term competitions do not prevent cooperation between the two parties. But now, the situation has changed.

On the one hand, the current team at OpenAI consists of a group of believers in technology. Regardless of the external speculation about concerns regarding the safety of AI or disagreement with Altman’s commercialization strategies at OpenAI, it implies that OpenAI’s future direction will undergo significant adjustments, which introduces more variables into aligning with Microsoft’s demands.

On the other hand, today, the development of AGI is still in its very early stages. Microsoft, with its resources and wealth, has no reason to be completely dependent on OpenAI. With Altman and other former core members of OpenAI joining now, it seems that Microsoft has finally completed the puzzle. The name “advanced AI research team” given by Nadella, without any limitations, and the promise to “provide them with the resources they need for success,” leave ample room for imagination in the coming development.

More importantly, although Microsoft previously claimed to invest billions of dollars in OpenAI, multiple foreign media sources confirmed that this money did not arrive all at once. Currently, Microsoft has only provided a small amount of cash to OpenAI, with the rest of the funds being realized through non-cash means, such as providing the necessary computing power support for AI training.

With such a uniquely structured organization as OpenAI, and after experiencing the events surrounding Altman, Microsoft may also have to consider whether to put all its eggs in one basket is the best choice.