Microsoft Emerges as the Winner in OpenAI Chaos

Shortly after 2 am Pacific time on Monday, multiple OpenAI employees, including Chief Technology Officer Mira Murati, simultaneously posted on X: “OpenAI is nothing without its people.” Sam Altman, who had been removed as the company’s CEO on Friday, reposted many of these messages. By that time, Altman had already secured a new position. Satya Nadella, CEO of Microsoft, a major investor and partner of OpenAI, announced late on Sunday that Altman and his co-founder Greg Brockman would be heading a new “advanced AI research team” at the tech giant. Nadella’s statement hinted at the possibility of other members from the startup joining Microsoft.

By bringing Altman and Brockman on board amid the turmoil at the top of OpenAI, Microsoft has successfully acquired one of the most successful management teams in artificial intelligence without having to purchase the company, which was valued at $86 billion before the upheaval.

“Satya now looks like one of the most epic kingmakers,” says Nathan Benaich, founder and general partner at Air Street Capital and author of the State of AI report.

At least three other senior researchers—Jakub Pachocki, Aleksander Mądry, and Szymon Sidor—have reportedly left OpenAI.

“The head and the arms and one of the legs [of OpenAI] have gone to Microsoft,” says tech analyst Azeem Azhar, author of the newsletter Exponential View. “This is an enormous opportunity for Microsoft because it gets to take Sam Altman and Greg Brockman and probably a large part of the leadership team, and many of the very best engineers and researchers.”

At Microsoft, Altman and Brockman will have access to substantial amounts of capital and computing power, as well as the tech giant’s support for developing other parts of the AI tech stack, including chips and consumer electronics. Altman was reportedly in the process of raising billions of dollars from investors for a new chip project in the weeks leading up to his removal. Altman and OpenAI had also been linked to a hardware venture with former Apple head of design Jony Ive that was supposedly aiming to build the “iPhone of AI,” backed by Softbank’s Masayoshi Son.

“I’m sure [Microsoft] will give Sam the leeway to go up and down the stack,” Azhar says. “Microsoft itself is developing its own chips for AI. Well, Altman’s group can probably help with that now, and they will be developing consumer electronics like surface computers and so on. Sam can start to head into that direction now through this group.”

Microsoft shares dropped on Friday as news of the issues at OpenAI spread. OpenAI’s technology has been integrated into several Microsoft products, including its Bing search engine, and the two companies’ fortunes had been considered deeply intertwined. The news that Altman will be joining the company is likely to restore confidence, analysts say.

“[Microsoft] hired this key asset, and now he will oversee OpenAI from Redmond along with Nadella, which is music to the ears of investors,” says Dan Ives, senior equity research analyst covering the technology sector at Wedbush Securities. “If Microsoft lost Altman, he could have gone to Amazon, Google, Apple, or a host of other tech companies craving to get the face of AI globally in their doors. Instead, he is safely in Microsoft’s HQ now leading the company’s key AI efforts.”