OpenAI appoints new boss as Sam Altman joins Microsoft in Silicon Valley twist

By Jeffrey Dastin, Anna Tong and Stephanie Kelly

SAN FRANCISCO (Reuters) -OpenAI named ex-Twitch boss Emmett Shear as interim CEO, while outgoing chief Sam Altman moved to backer Microsoft (NASDAQ:), in a surprise turn of events that capped a tumultuous weekend for the startup at the heart of an artificial intelligence boom.

The appointments, settled late at night on Sunday, followed Altman’s abrupt ousting just days earlier as CEO of the ChatGPT maker and ended speculation that he could return.

Microsoft rushed in to attract some of the biggest names that left OpenAI, including another co-founder Greg Brockman, to keep key talent out of the hands of rivals including Alphabet (NASDAQ:)’s Google and Amazon.com (NASDAQ:) while seeking to stabilize OpenAI, in which it has invested billions.

The startup’s newly appointed interim head moved quickly to dismiss speculation that OpenAI’s board ousted Altman due to a spat over the safety of powerful AI models. Shear vowed to open an investigation into the firing, consider new governance for OpenAI and continue its path of making available technology like its viral chatbot.

“I’m not crazy enough to take this job without board support for commercializing our awesome models,” Shear said, adding: “OpenAI’s stability and success are too important to allow turmoil to disrupt them like this.”

The startup dismissed Altman on Friday after a “breakdown of communications,” according to an internal memo seen by Reuters.

Governing OpenAI is a non-profit. Its four-person board as of Friday consists of three independent directors holding no equity in OpenAI and Chief Scientist Ilya Sutskever.

“I deeply regret my participation in the board’s actions. I never intended to harm OpenAI. I love everything we’ve built together and I will do everything I can to reunite the company,” Sutskever said in a post on the X social media platform.

Sutskever, as well as former interim CEO Mira Murati, were among the nearly 500 employees who threatened to leave the company on Monday unless the board steps down and reinstates Altman and Brockman, according to a letter seen by Reuters.

The staff also demanded the appointment of two new independent directors to the board, such as former Salesforce (NYSE:) CEO Bret Taylor and ex-Texas congressman Will Hurd.

“Your actions have made it obvious that you are incapable of overseeing OpenAI,” the employees said in the letter.

“Microsoft has assured us there are positions for all OpenAI employees at this new subsidiary should we choose to join,” they added.

OpenAI did not immediately respond to a request for comment. It was not clear why Murati had stepped down as interim CEO.

DIFFERENT IDEALS

A source familiar with the matter said OpenAI employees are split between different ideals.

Some – usually those who joined before 2022 – are focused on building artificial general intelligence and against moving too fast without sufficient guardrails, while others recruited after the success of ChatGPT are more keen on quickly building and launching products akin to the traditional idea of a Silicon Valley startup, the source said.

“This weekend was simply the detonation of a bomb that has been waiting to go off,” according to Radio Free Mobile analyst Richard Windsor.

Altman is becoming CEO of a new research group inside Microsoft and will be joined by other departing OpenAI colleagues who quit following his ouster, Microsoft CEO Satya Nadella said in posts on X.

Some of those joining Altman at Microsoft include senior researchers Szymon Sidor and Jakub Pachocki, according to Brockman.

Microsoft has invested billions of dollars in OpenAI and staked its future on the startup, releasing what it called AI copilots to business customers based on OpenAI’s technology.

“AI is a big opportunity for, and potential threat to, incumbent technology leaders so Microsoft will be delighted to be able to benefit from Altman’s knowledge and vision and prepare itself for a new major era of technological change,” said Russ Mould, investment director at AJ Bell.

Microsoft had supported a return by Altman to the startup, according to sources, a move that seemed likely only hours prior to Monday’s announcements. Teasing his expected reconciliation with OpenAI’s board, Altman had posted an image of himself on X on Sunday wearing an OpenAI guest badge with the caption: “first and last time i ever wear one of these.”

OpenAI researchers have viewed Microsoft’s vast reserves of computing power as essential to the development of superintelligent machines. Nadella and Shear both said their companies remained committed to their partnership, while resources would go to Altman’s new group at Microsoft as well.

“We look forward to moving quickly to provide them with the resources needed for their success,” Nadella said.

In a separate post on X, Altman shared Nadella’s message with the words, “the mission continues.”