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

OpenAI’s recent move to appoint Emmett Shear, former Twitch CEO, as interim CEO, while outgoing chief Sam Altman transitions to Microsoft (NASDAQ: MSFT), has marked a surprising turn of events. The decisions, finalized late on Sunday, followed Altman’s sudden exit as the CEO of ChatGPT, putting to rest speculations about his potential return.

In a statement on the X social media platform, Shear dispelled rumors that Altman’s departure was linked to a disagreement over the safety of potent AI models. Shear expressed his commitment to investigating the circumstances, exploring new governance structures for OpenAI, and maintaining the trajectory of providing groundbreaking technology, such as the viral chatbot.

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

Shear, who co-founded Twitch, had previously stepped down from the live video streaming platform earlier this year.

Altman’s dismissal from OpenAI, citing a “breakdown of communications,” occurred on Friday, according to an internal memo seen by Reuters. Altman, a founding co-chair, played a pivotal role in initiating the generative AI trend with the release of ChatGPT, a chatbot that rapidly became one of the world’s fastest-growing software applications.

Microsoft CEO Satya Nadella announced on X that Altman would lead a new research group within the software giant. Other departing OpenAI figures, including outgoing President Greg Brockman, will also join this new venture.

Microsoft’s significant investment in OpenAI and its reliance on the startup, releasing AI copilots based on OpenAI’s technology to business customers, was evident in the nearly 2% increase in Microsoft’s shares on Monday morning. The move seems aimed at stabilizing OpenAI and retaining crucial talent, preventing rivals like Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) from acquiring it.

Russ Mould, investment director at AJ Bell, stated, “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.”

Despite earlier indications supporting Altman’s return to OpenAI, Microsoft’s support for this move waned, ultimately leading to the unexpected developments. Altman’s post on X, wearing an OpenAI guest badge with the caption “first and last time I ever wear one of these,” hinted at a different outcome.

OpenAI researchers consider Microsoft’s extensive computing resources crucial for developing superintelligent machines. Nadella and Shear emphasized their commitment to the partnership, ensuring resources for Altman’s new group at Microsoft.

The decision not to reinstate Altman as OpenAI’s chief has left investors and employees grappling with uncertainties, fearing a potential talent exodus and its impact on an upcoming $86 billion share sale.

Following Shear’s appointment, distraught employees reportedly left OpenAI headquarters, and several leaders posted on X, stating, “OpenAI is nothing without its people.” Some departing researchers, including Szymon Sidor, are reportedly joining Microsoft’s new effort.

The longstanding conflict between OpenAI’s mission to benefit humanity through technology and investor expectations for financial returns has intensified. Analyst Richard Windsor of Radio Free Mobile characterized the recent events as the culmination of a long-anticipated explosion.

Governing OpenAI as a non-profit involves a four-person board, as of Friday, consisting of three independent directors without equity in OpenAI and Chief Scientist Ilya Sutskever. Sutskever expressed regret for his involvement in the board’s actions and pledged to do everything in his power to reunite the company in a post on X.