In a boardroom drama designed for the TikTok generation, Sam Altman was ousted as CEO of OpenAI, negotiated for a return and then landed at Microsoft along with Greg Brockman to lead an "advanced AI research team." The fact Microsoft CEO Satya Nadella moved so quickly illustrates the high stakes.
Nadella said on X that it will remain a partner of OpenAI, led CEO Emmett Shear, Co-founder of Twitch, but added Altman and Brockman. Perhaps the biggest takeaway--at least for Microsoft's market cap--is that Nadella said:
"We have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners."
For enterprises, that's about all you need to know about this OpenAI soap opera. A brief recap:
- OpenAI ousts Sam Altman as CEO over lying to board
- Altman is back, not back, lands at Microsoft in what could be a Steve Jobs-ish moment
- Nadella hearts OpenAI, but really hearts Altman and Brockman on X
- A roundup of news coverage via Techmeme
Given that OpenAI was the hub for a good bit of Microsoft's Copilot strategy, the software giant needed to manage through the OpenAI-Altman drama quickly and possibly use its own Azure models-as-a-service. On Friday, OpenAI said it fired Altman. Brockman resigned after the news. Key executives at OpenAI also started to bail.
Altman said on X that the "mission continues." The back-and-forth with Altman, Nadella and Brockman was only interrupted by Tesla and X CEO Elon Musk noting that Altman will have to use Teams now (Altman was fired on Google Meet).
Constellation Research CEO Ray Wang raised the questions about who will acquire OpenAI, where talent goes and the economics of generative AI. Here are a few other observations to ponder.
- Microsoft and OpenAI were a perfect match between a massive company with resources and a startup that could innovate quickly--until it wasn't. This blueprint will be analyzed going forward as a strategy case study. Did too much of Microsoft's generative AI strategy hitched to just a few people that didn't work for the company?
- Diversification matters. As I noted before, there can be too much choice in large language models. The trick is navigating how much generative AI choice gives an enterprise diversification. Bring your own model will look much better after this OpenAI fiasco.
- Yes, you'll need a Chief AI Officer to sort vendor AI messes.
- Own your intellectual property. The Microsoft-OpenAI weekend illustrates why your IP needs to be owned by you even if you're building on top of an LLM. The model that may emerge is one that revolves around first party data and open-source models.
- Don't bet too much of your strategy on a startup. Yes, OpenAI was an odd duck with a board composed of non-profit types and venture capital types. Startups can give enterprises more innovation and attention but have a plan in case of an emergency.
