Sam Altman to Microsoft: 8 Quick Implications

Overnight, ex-OpenAI CEO Sam Altman and ex-OpenAI president Greg Brockman gave up their quest to return to OpenAI and agreed to join Microsoft.

The two executives will build “a new advanced AI research team” at Microsoft, according to its CEO Satya Nadella. Many of their former colleagues will likely follow.

The OpenAI board, meanwhile, replaced interim CEO Mira Murati with a new interim CEO, Emmett Shear, the former CEO of Twitch. And in a blink, the craziest weekend in recent tech memory ended. (Unless, somehow, Altman still returns to OpenAI — more below).

Here are eight thoughts about the implications:

OpenAI Diminished

Altman will head to Microsoft, and dozens (or more) of his former OpenAI colleagues will come along. Brockman already announced GPT-4 lead Jakub Pachocki will join Microsoft, among others. Now, more than 500 of OpenAI’s 700 employees are threatening to leave as well. Whether it’s hundreds or dozens of defections, the outflow of talent will hamper OpenAI’s ability to function. It’s a different company as of this morning.

Welcome to the Era of Model Agnosticism

Many companies’ AI strategies rely on OpenAI. They built on GPT-4 and figured they could depend on it. The model may remain stable, but OpenAI’s corporate instability changes everything. Today, anyone building with OpenAI will ask how to make their products compatible with any model, including Anthropic or (eventually) Gemini. AI competition will heat up.

Microsoft Wins Big

Sam Altman now reports to Satya Nadella without a non-profit arm telling him what to do. That’s a big win for Microsoft. Altman can use all the Azure compute he wants to train his next model, and Microsoft can more seamlessly integrate that model into its products. “It’s gonna take a while to re-train, but that’s OK,” said NVIDIA Senior AI scientist Jim Fan. “Eventually, it will be much easier for MSFT to deeply integrate GPTs into Teams, Office, Windows, etc.”

A Temporary Opening In The AI Field

As Altman and Brockman work on building new AI models at Microsoft, there will be an opening for all manner of companies to form and thrive in the AI field. Ramping up a world-class AI research team takes time, and that time is an opportunity. “All of a sudden, it’s open season in the AI landscape,” said Conviction VC Sarah Guo. “Everyone is much less inspired by (and less intimidated by) an OpenAI without Sam and Greg, however many genius folks it has.”

AI Safety’s Confidence Crisis

OpenAI’s board had a mandate to guide the safe development of artificial general intelligence. Given that it couldn’t run a board properly, the pursuit of “safe” human-level AI seems less feasible than it once appeared. This will likely lead to a crisis of confidence in the AI safety field, and reasonably so.

OpenAI’s New CEO Wants To Slow AI Research

New OpenAI interim CEO Emmett Shear spoke against a six-month research pause, but it was for a research slowdown when a pause was in vogue in September. “I’m in favor of slowing down, which is sort of like pausing except it’s slowing down,” he said. “If we’re at a speed of 10 right now, a pause is reducing to 0. I think we should aim for a 1-2 instead.” Shear’s an interesting character. More to come on him.

Woe Unto The OpenAI Investors (And The Governance They Enabled)

Deep-pocketed investors, including Sequoia Capital and Thrive Capital, collectively put billions into OpenAI, and now some are considering writing those investments down to zero. Clearly, betting on a company with OpenAI’s governance structure was risky, and now that risk is coming due. Microsoft’s $13 billion investment contained a good deal of Azure credits, so it may not lose all that much. But wacky corporate governance structures in the OpenAI style will likely be history after this weekend. Or, at least something investors consider more deeply before dumping buckets of cash into these companies.

Could Sam Come Back After All?

Most OpenAI employees — including Altman coup participant Ilya Sutskever — threatened to decamp for Microsoft without Altman’s reinstatement, leaving a chance that Altman would still return. That possibility seems quite unlikely now that Microsoft has announced Altman’s hiring and the market opened. For Microsoft, changing anything further would show instability. Then again, this story is a live wire, and nothing should shock at this point.

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