Microsoft wins the war at OpenAI

Sam Altman heads to Microsoft

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The Future. Microsoft turned lemons into lemonade by hiring OpenAI’s Sam Altman as the CEO of a new AI firm at the tech giant. While its hefty investment in OpenAI may turn out to be a bust, Microsoft is betting that giving Altman and co. a long leash to do as they please will help make that inevitable pain a distant memory. But the concerns of OpenAI’s board — which includes one of the most revered AI scientists and two execs with deep convictions about protecting humanity from the dangers of AI — still stand. That means it may now be ultimately up to Microsoft CEO Satya Nadella, and Nadella alone, to ensure profit doesn’t get in the way of safety.

Altman acquisition
Microsoft’s acquisition of OpenAI’s leadership will likely go down as one of the savviest business moves in Silicon Valley history.

  • Late Sunday night, Microsoft hired Sam Altman as CEO of a yet-unnamed AI company existing under Microsoft. OpenAI co-founder and president Greg Brockman is joining him, along with several other senior researchers who defected over the weekend.
  • And with over 700 OpenAI employees (95% of the company) threatening to quit unless the company’s board of directors resign and rehire Altman, they’ll likely join Altman at the new venture (Microsoft said they’ll hire whoever wants to come over).
  • The move is a boon to Microsoft, which saw its stock soar to an all-time high after the announcement of hiring the most prominent executive in AI.
  • Meanwhile, Microsoft still has a 49% stake in Open AI, having invested $13 billion in the firm, integrated ChatGPT into many of its products, and become the cloud-computing provider for the company. It gets to have its cake and eat it, too.

Now that Nadella has the influential founders on his executive team, he’ll likely let them loose to turn AI into one of Microsoft’s crown-jewel offerings (and a major moneymaker for the company). As part of OpenAI’s unique structure, Microsoft’s profits were capped at a certain return-percentage. Now, the sky’s the limit.

And Altman has the ability to develop as fast as his heart desires, giving him the money (plenty of it) and resources (blue-chip branding and a fledgling microchip business) to unleash AI onto the world in his image.

Whether or not that’s a good thing is another question entirely.

David Vendrell

Born and raised a stone’s-throw away from the Everglades, David left the Florida swamp for the California desert. Over-caffeinated, he stares at his computer too long either writing the TFP newsletter or screenplays. He is repped by Anonymous Content.


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