Sam Altman’s ouster leaves OpenAI, Microsoft employees ‘completely shocked,’ insiders say

Microsoft leaders officially received only a few minutes warning before the announcement that Sam Altman, co-founder and CEO of OpenAI and one of Microsoft’s biggest investments, was being forced out of the company on Friday afternoon. They were the lucky ones.

Over at OpenAI, employees found out when the rest of the tech world did. At a little after 12:30 p.m. pacific time, the company released a harshly worded statement announcing that Altman was out, and that its CTO, Mira Murati was immediately replacing him on an interim basis.

The announcement left OpenAI and Microsoft workers “completely shocked,” people inside both companies told Business Insider. There was a brief meeting at OpenAI’s San Francisco headquarters, where the public statement was reiterated and calm was encouraged.

People at the company were glad that at least Ilya Sutskever, OpenAI’s chief scientist, co-founder and a member of the board, was still with them. He’s been a respected leader at the company for years and has been “in charge” of the tech work for some time, the person at OpenAI said.

The acceptance was short-lived. Another shock came about an hour later when OpenAI co-founder and president Greg Brockman announced that he had “quit” over Altman’s ouster. He told staff in an email, also posted to X, that he did so “based on today’s news.” Brockman was earlier removed as OpenAI chairman, according to the company’s statement.

One person in the AI field, who does not work at OpenAI but knows many people at the company, called the sudden executive shakeup, “One for the history books.” He compared Altman being forced out to when Steve Jobs was fired from Apple in 1985 after clashing with its then CEO.

Those inside OpenAI and Microsoft agreed the move was sudden. But Microsoft says it stands by its partner’s new leader. “We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and an exciting product roadmap; and remain committed to our partnership, and to Mira and the team. Together, we will continue to deliver the meaningful benefits of this technology to the world,” Microsoft CEO Satya Nadella said in a statement.

Perhaps there were signs all was not well when it came to OpenAI’s business, one Microsoft employee told BI, which Microsoft has reportedly backed to the tune of at least $10 billion.

“I think its valuation is enormous, and there’s some good stuff happening around AI, but the reality is the economics here are you need to charge $30+ for AI features to handle the underlying infrastructure costs, which is like double or more whatever people currently pay for a productivity tool,” the Microsoft employee said.

“OpenAI is also going to continually need to spend billions training the models, on top of the inferencing cost,” the person added.

OpenAI did not immediately respond to a request for comment.

Nadella’s statement also pointed to the company’s recent tech conference to validate how committed it remains to AI: “As you saw at Microsoft Ignite this week, we’re continuing to rapidly innovate for this era of AI, with over 100 announcements across the full tech stack from AI systems, models, and tools in Azure, to Copilot. Most importantly, we’re committed to delivering all of this to our customers while building for the future.”

Are you an OpenAI employee or someone with a tip or insight to share?

Contact Kali Hays at khays@insider.com, on secure messaging app Signal at +1-949-280-0267, or through Twitter DM at @hayskali. Reach out using a non-work device.

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Contact reporter Ashley Stewart via the encrypted messaging app Signal (+1-425-344-8242) or email (astewart@insider.com).