Microsoft CEO Satya Nadella Lauds Sam Altman’s Return As OpenAI’s Leader

Sam Altman’s return to OpenAI and the board changes bring a cap to a series of dramatic and fast-moving events over the past five days for the startup, which has been of major strategic importance to Microsoft and its ambitions to be the world’s dominant provider of generative AI computing services.

After five days of turmoil at OpenAI, the high-flying generative AI startup behind ChatGPT has reinstated Sam Altman as CEO and changed its board roster—moves that received a big thumbs-up from the leader of the company’s largest backer, Microsoft CEO Satya Nadella (pictured).

OpenAI announced just after 1 a.m. Eastern Time on Wednesday that Altman would return as the company’s CEO after its board of directors fired him last Friday for what they said was him not being “consistently candid in his communications with the board.”

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

Greg Brockman is also returning after stepping down as OpenAI’s president when the board removed him as a director the same day Altman was ousted without his knowing.

The generative AI startup also announced a “new initial board.” While existing director Adam D’Angelo, CEO of Quora, will remain on the board, OpenAI co-founder Ilya Sutskever and Georgetown Center for Security and Emerging Technology’s Helen Toner have left.

Replacing them are former Salesforce co-CEO Bret Taylor, who will become the board’s new chair, and former U.S. Treasury Secretary Larry Summers.

OpenAI described the moves as part of “an agreement in principle” and said the company is “collaborating to figure out the details.”

The startup did not respond to a request for comment.

A spokesperson for Microsoft referred CRN to comments made by Altman and Nadella Wednesday morning.

Nadella, Altman Vow To Build On ‘Strong’ Microsoft-OpenAI Partnership

Altman’s return to OpenAI and the board changes bring a cap to a series of dramatic and fast-moving events over the past five days for the company, which has been of major strategic importance to Microsoft and its ambitions to be the world’s dominant provider of generative AI computing services.

By Monday morning, Nadella had announced that Altman and Brockman would join Microsoft to lead a new advanced AI research team while vowing his commitment to the company’s partnership with OpenAI. At the same time, a majority of OpenAI’s employees had threatened to quit the startup if Altman didn’t return and the board’s current members stayed in place.

Nadella had reportedly been blindsided by the board’s ouster of Altman and offered to support the fired CEO in whatever Altman ended up doing next.

But despite Nadella saying that Microsoft would hire Altman and Brockman, the two former OpenAI leaders continued to discuss their potential return to the startup, which culminated in Wednesday’s announcement about their reinstatement.

“I love OpenAI, and everything I’ve done over the past few days has been in service of keeping this team and its mission together,” Altman wrote on X, the social network formerly known as Twitter. “When I decided to join [Microsoft] on [Sunday] evening, it was clear that was the best path for me and the team.”

What changed for Altman was the board’s new composition and support from Nadella to return as OpenAI’s CEO. As the company’s leader once again, he has vowed to build “on our strong partnership” with Microsoft.

Nadella said Microsoft is “encouraged by the changes to the OpenAI board” and believes “this is the first essential step on the path to more stable, well-informed and effective governance.”

“Sam, Greg and I have talked and agreed they have a key role to play along with the [OpenAI] leadership team in ensuring [it] continues to thrive and build on its mission,” he said in a post to X.

“We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners,” Nadella added.

Over the past year, OpenAI and Microsoft have enjoyed a symbiotic relationship, with the latter getting access to OpenAI’s large language models to power new generative AI products and the former receiving funding and access to GPU-powered infrastructure to power development and operations.

What Led To OpenAI’s Turmoil

Altman had reportedly been at odds with fellow board members for more than a year, according to The New York Times and other news outlets. Among the issues was a research paper co-authored by Toner, who was an independent OpenAI board director, that criticized the company’s AI safety efforts.

There were other sources of division within OpenAI, and they included the company’s release last year of ChatGPT, the cloud-based chatbot that provides convincing responses to a vast array of inquiries using large language models.

When OpenAI launched ChatGPT and prompted a frenzy of generative AI hype and spending by businesses, the move “supercharged the race to create products for profit as it simultaneously heaped unprecedented pressure on the company’s infrastructure and on the employees focused on assessing and mitigating the technology’s risks,” according to a report by The Atlantic.

Various reports have suggested that these tensions have been simmering for years as the company transformed from a nonprofit to a for-profit venture focused on commercializing AI technologies.

The company was founded as a nonprofit organization in 2015 by Altman, Elon Musk and other tech bigwigs such as LinkedIn founder Reid Hoffman and PayPal founder Peter Thiel.

OpenAI’s founders had said they started the organization to “advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return.”

The organization would go on to develop cutting-edge technologies pushing the limits of AI capabilities. But by early 2018, Musk had grown concerned that OpenAI had fallen behind Google in AI research capabilities and proposed taking over the company, according to a 2023 report by news outlet Semafor.

The proposal was rejected by Altman and OpenAI’s other founders, which prompted Musk to leave the company and say he was doing so over a conflict of interest with his electric vehicle company, Tesla, which was developing AI technology for autonomous driving.

With a need to cover the skyrocketing costs of AI computing and accelerate AI research, the nonprofit said in 2019 that it was forming a for-profit venture, which it would control and could raise capital from investors and offer employees startup-like equity. The company noted at the time that there was no precedent for an organization to operate as a “hybrid of a for-profit and nonprofit.”

“We want to increase our ability to raise capital while still serving our mission, and no pre-existing legal structure we know of strikes the right balance,” wrote Brockman and Sutskever in a 2019 blog post.