Analysis: Microsoft Thrived From Its Lack Of Control Over OpenAI, Altman

The departure of Sam Altman, Greg Brockman and, potentially, a large percentage of OpenAI employees to Microsoft may not ultimately be the best thing for the tech giant’s aspirations in GenAI.

One of the biggest strengths of OpenAI has long been that it had backing, financial and otherwise, from Microsoft, without needing Microsoft to approve its decisions.

Case in point: The decision to release ChatGPT to the world, just shy of one year ago. Would that decision have ever been made if it was a unit of the Microsoft machine? Even a relatively independent unit, as Sam Altman has been promised his will be?

This is a major question to ponder as Altman, Greg Brockman and, potentially, a large percentage of OpenAI employees head over to Microsoft.

Yes, it’s true that Altman will have a CEO title inside of Microsoft, signifying that he and his team will operate fairly independently, a la GitHub. But it’s not clear to me that something as bold as releasing a not-quite-ready application — as ChatGPT clearly was on Nov. 30, 2022 — would be possible within the Microsoft structure. As Kevin Roose of the New York Times phrased it in his revealing piece from February, “One day in mid-November, workers at OpenAI got an unexpected assignment: Release a chatbot, fast.”

In hindsight, releasing ChatGPT at that time was absolutely the right move from a competitive standpoint. As intended, the release gave OpenAI the pole position in generative AI and left Google scrambling. From all indications, Google has not recovered from this. Microsoft, meanwhile, has thrived.

OpenAI was always the best place for Altman and Brockman and their impressive team. And even with the drama of the past few days, it undoubtedly still is.

Of course, with OpenAI’s board not budging and hiring Emmett Shear as CEO, this is a moot point. And Microsoft is probably reasonably happy with this outcome.

But the truth is that Microsoft massively benefited from its lack of control over OpenAI. Sometimes, Microsoft needs to be protected from itself. And in this case, that would seem to be what is best for Microsoft’s interests in GenAI.