Sam Altman Is Back At OpenAI. What Does The Turmoil Mean For Microsoft And OpenAI's Rivals?

Within days of his firing, has reached an agreement to rejoin generative AI giant , which has a new board.

Altman鈥檚 return as CEO follows days of turmoil at -backed OpenAI. On Friday, Altman was abruptly fired by the board, which only said 鈥渉e was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities,鈥� but offered no further explanation. Subsequent reporting hasn鈥檛 provided much concrete detail about the reasons for his ouster, either.

On Monday, Microsoft, which has committed more than $10 billion toward OpenAI, said Altman had joined the software giant to head up a new AI research unit there. Also on Monday, almost all of OpenAI鈥檚 770 employees signed an open letter threatening to leave the company and join Altman at Microsoft if OpenAI鈥檚 board didn鈥檛 resign and reinstate him as CEO.

That has now largely happened.

, the former co-CEO of 1,will chair OpenAI鈥檚 new board. Economist and former Treasury Secretary also joins the board. CEO will remain on the board as the only previous board member to do so.

Microsoft CEO has said in media interviews that there is no substantial smoking gun behind the previous board鈥檚 allegations against Altman. 鈥淭he board has not talked about anything that Sam did other than some breakdown in communications,鈥� said Nadella in an on Monday.

With Nadella at the helm, Microsoft negotiated a deal that placed it at the center of AI developments, one of the more in tech in the last decade. Beyond OpenAI, the software giant and its venture fund .

On Microsoft鈥檚 partnership

While Microsoft didn鈥檛 have a board seat at OpenAI due to the startup鈥檚 unusual corporate structure, the software giant is by far its biggest backer.

鈥淚 think it was a great structure, where in some ways they controlled OpenAI de facto,鈥� , a long-time investor and president at , who does not have a stake in OpenAI or relationship to it or Microsoft, told SA国际传媒 News. 鈥淎lthough they didn’t have a board seat, they paid them so much money and all the training was being done on Microsoft infrastructure. The challenge is that when you bring them in-house, you often do get slowed down.鈥�

Had OpenAI imploded or seen a mass exodus to Microsoft, the team鈥檚 advancements in AI would likely have slowed, Das said, since there typically is a lot more oversight and rigidity within a large corporate entity versus a standalone startup.

At OpenAI, 鈥測ou can do things at the edges that you’re maybe not going to get a lot of bureaucracy and scrutiny from regulatory bodies,鈥� said Das. 鈥淎nd partly that’s why has been behind.鈥�

OpenAI鈥檚 rivals

OpenAI rivals and were potential beneficiaries of the turmoil at OpenAI. The fallout created more opportunities for competitors, as the OpenAI juggernaut is slowed, and talent is splintered.

鈥淲e will want some governance changes,鈥� Nadella said on on Monday, adding 鈥淪urprises are bad.鈥�