Tech industry reacts to a chaotic weekend for OpenAI and Microsoft

The past few days have been chaotic for the AI industry, with technology experts weighing what a shakeup at OpenAI could mean for the nascent sector and some of its key players.

OpenAI, the company behind ChatGPT which launched AI into the mainstream late last year, said Friday that it was removing its CEO Sam Altman and making its technology chief Mira Murati interim CEO in his place.

But before the weekend was even over, OpenAI changed course, announcing that former Twitch chief Emmett Shear would take over from Altman instead, at least on a temporary basis.

Meanwhile, Altman himself has already found a new role leading a new advanced AI research team at Microsoft, where he will be joined by former OpenAI Board Chair Greg Brockman and several other employees.

But Altman’s move could simply be a case of “damage control” for Microsoft, according to Richard Windsor, founder of digital research company Radio Free Mobile. This is linked to Microsoft’s immense investments in OpenAI, he said on CNBC’s “Street Signs Europe” Monday.

Microsoft began investing in OpenAI as early as 2019, initially with around $1 billion. That figure has ballooned since to an amount reported to be closer to $13 billion. Microsoft has also integrated OpenAI’s technologies in products like search engine Bing and various softwares.

“A large amount of that value is tied up in the founders and in the engineers that are inside the company,” Windsor said.

Meanwhile, other tech experts have been backing Microsoft CEO Satya Nadella’s swift move to hire Altman in-house.

“Incredible execution by Satya in one of the most dynamic situations in tech history,” Aaron Levie, CEO of cloud-sharing and management company Box, wrote on X, formerly Twitter.

Aviral Bhatnagar, an investor at Venture Highway, had a similar view.

“You now understand why Satya Nadella is one of the greatest tech CEOs of this generation,” he said in a post on X.

“Kept Altman in the fold, kept the transition as neat as possible, managed the chaos and the wild board decision making, didn’t destroy OpenAI. What a boss move.”

Windsor suggested that further OpenAI employees may soon follow Altman to Microsoft, which he said could have detrimental consequences for OpenAI. This could even include OpenAI tech chief Murati who has been crucial in developing OpenAI’s products, he noted.

“If she goes off with Sam and the others to join Microsoft, what’s left of OpenAI? Arguably not much,” Windsor said.

Several OpenAI employees have also shared comments on X, often referencing that people are crucial for the company.

The chaotic developments have also been criticized by Shear himself, the new interim CEO of OpenAI.

“It’s clear that the process and communications around Sam’s removal has been handled very badly, which has seriously damaged our trust,” he said in a post on X, formerly Twitter, in which he also confirmed he would step in as interim CEO.

Shear suggested he would launch an investigation to examine the process that led to the recent events and produce a report on them within his first thirty days at OpenAI.

This has been echoed by experts, including Windsor, who said that the situation could severely damage the company’s reputation and undermine public confidence in the company.

Meanwhile Wedbush Securities’ Ives called the weekend’s developments a “circus clown show,” and described it as a “coup attempt” which elevated Shear to interim CEO “in a move that will forever be viewed as a tainted move by OpenAI that caused chaos internally and externally.”

Elsewhere Nathan Benaich, general partner of Air Street Capital, added that the events showed “that no one is immune from the laws of corporate physics,” and “one bad decision” can have immense consequences.

“Considering Sam’s centrality to OpenAI’s vision and the personal loyalty he commands, this is the most baffling decision from an AI lab I’ve ever witnessed,” he said.

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