Microsoft Emerges as the Winner in OpenAI Chaos

Just after 2am Pacific Time on Monday morning, several OpenAI staffers, including its chief technology officer Mira Murati, posted in unison on X “OpenAI is nothing without its people.” Sam Altman, who was dramatically removed as the company’s chief executive on Friday, reposted many of them. By then, Altman already had a new job. Satya Nadella, CEO of Microsoft, a major investor and partner of OpenAI, announced late on Sunday night that Altman and his cofounder Greg Brockman would be joining the tech giant to head a new “advanced AI research team.” Nadella’s statement seemed to suggest that others from the startup would be joining Microsoft.

By hiring Altman and Brockman amidst the chaos at the top of OpenAI, Microsoft has managed to acquire one of the most successful management teams in artificial intelligence without having to buy the company—whose pre-chaos valuation was $86 billion.

“Satya now looks like one of the most epic kingmakers.” says Nathan Benaich, founder and general partner at Air Street Capital and author of the State of AI report.

At least three other senior researchers: Jakub Pachocki, Aleksander Mądry and Szymon Sidor, have reportedly left OpenAI.

“The head and the arms and one of the legs [of OpenAI] have gone to Microsoft,” says tech analyst Azeem Azhar, author of the Exponential View newsletter. “This is an enormous opportunity for Microsoft because it gets to take Sam Altman and Greg Brockman and probably a large part of the leadership team, and many of the very best engineers and researchers.”

At Microsoft, Altman and Brockman will have access to huge amounts of capital and compute power, Azhar says, and the tech giant’s support to develop other parts of the AI tech stack, including chips and consumer electronics. Altman was reportedly trying to raise billions of dollars from investors for a new chip project in the weeks running up to his firing. Altman and OpenAI had also been linked to a hardware venture with former Apple head of design Jony Ive, which was reportedly hoping to build the “iPhone of AI,” backed by Softbank’s Masayoshi Son.

“I’m sure [Microsoft] will give Sam the leeway to go up and down the stack,” Azhar says. “Microsoft itself is developing its own chips for AI. Well, Altman’s group can probably help with that now, and they will be developing consumer electronics like surface computers and so on. Sam can start to head into that direction now through this group.”