The trouble at OpenAI since Friday had raised concerns about the impact for Microsoft, which has pumped in billions of dollars and uses the firm’s technology for most of its artificial intelligence offerings
Microsoft emerged on Monday as the big winner of the upheaval at OpenAI, hiring ousted CEO Sam Altman and other key staff of the startup to prevent a potential flight to rivals and help strengthen its lead in the AI race.
The trouble at OpenAI since Friday had raised concerns about the impact for Microsoft, which has poured in billions of dollars and uses the firm’s technology for most of its artificial intelligence offerings like its Copilot AI assistant.
The move ensured “the golden child of AI” will stay with Microsoft, analysts stated, as the company competes with Google to dominate the growing industry.
Microsoft’s shares increased 2 per cent to a record high before giving up some of the gains. The firm was on track to add around $30 billion to its market value at current levels. That was near the valuation OpenAI commanded in its last fundraise.
Altman will lead a new research team at the software major after his surprise ouster that shocked the tech industry. He will be joined by Greg Brockman, another OpenAI cofounder, as well as other researchers including Szymon Sidor.
Microsoft has been able to turn a crisis into an opportunity with the hiring of Sam Altman and Greg Brockman, said Gil Luria, senior software analyst at D.A. Davidson.
Assuming they will be able to hire many more from the OpenAI team, they will have taken over the key development path for AI, Luria said.
Around 500 employees of the startup also threatened to leave unless the board stepped down and reinstated Altman, as well as Brockman, as per a letter reviewed by Reuters.
Your actions have made it clear that you are incapable of overseeing OpenAI, the employees said on Monday in the letter, adding, Microsoft has assured us there are positions for all OpenAI employees at this new subsidiary should we opt to join.
Analysts said an employee exodus was expected because of concerns over governance and the potential impact on what was expected to be a share sale at an $86 billion valuation, potentially impacting staff payouts at OpenAI.