Microsoft Gets Altman; What about $10Bn?

Barely ten months after pumping in $10 billion into ChatGPT maker OpenAI, Microsoft has now hired its co-founders Sam Altman and Greg Brockman to manage their own advanced artificial intelligence (AI) research team. The move, which added $250 billion to the tech giant’s market value within a day, could actually prove to be a challenge for the duo who put AI into our hands. 

The decision, perceived as Microsoft’s smarts to keep Altman and Brockman from joining their rivals, still leaves us wondering about the $10 billion they paid to acquire a stake in OpenAI. Satya Nadella took to X (formerly Twitter) to clarify that Microsoft’s association with the company will continue and that he was looking forward to meeting OpenAI CEO Emmett Shear.  

He also noted that the two co-founders of OpenAI would be joined by colleagues, which we believe are those employees who had quit the company to protest Altman’s sacking by the OpenAI Board. Nadella also reaffirmed his team’s commitment to proceed with innovations to fulfill all that was announced at Microsoft Ignite and continue to support its partners. 

What happens to the Microsoft-Open AI deal?

It is quite clear that Nadella would’ve used Microsoft’s leverage to get the Board to reconsider their decision of sacking Altman, ostensibly over concerns that he wasn’t open about some of the consequences of an AI-led world. For the record OpenAI has received only a fraction of the $10 billion investment agreed with Microsoft. 

Moreover, a significant portion of that is in the form of cloud compute purchases instead of cash and in case Microsoft reneges by withholding these credits or the rest of the cash, OpenAI could end up facing a major change as the costs of running and training its AI systems have mounted to an extent where the company could become financially unviable. 

Nadella is a winner, but what about Altman?

While Nadella has definitely emerged a clear winner in this situation, it remains to be seen how Sam Altman manages the complexity of creating new innovations while remaining connected with his old company, thanks to Microsoft’s investments in the latter. Given the frenetic pace at which incidents have moved, it’s tough to really predict the future at this juncture. 

However, we can speculate, given the nature of OpenAI which has emerged as a for-profit monster overseen by a not-for-profit board. When the basic motives of existence differ so violently, the ones helming it do feel the heat, as Altman already has. That he hasn’t really been answerable to the public in his past ventures, could further queer the pitch at Microsoft.

The stakeholder vs Altman battle could grow bigger

In fact, Altman had gone on record when asked whether he would take OpenAI public anytime soon. Altman had stated unequivocally that when superintelligence was being developed, it’s likely that some decisions would be looked at strangely by investors. “I don’t want to be sued by… the public market, Wall Street, etc.” he had said. 

Whether he was helming OpenAI, or Reddit or even Y Combinator, Altman never had to answer to a board. In his early days at Microsoft, Nadella would keep him away from the board, but how this relationship develops in the future will determine Altman’s life at Microsoft. Given his penchant for side-stepping the AI threats, Altman will have to change his mindset. 

Because, there are several lawsuits threatening the entire industry as petitioners believe AI could potentially wipe out humanity. OpenAI worked far away from this limelight but when Microsoft steps in, there is no way public glare can be avoided. So, at some stage Altman will have to handle the challenge of developing superintelligence and answering shareholders. 

The immediate future for Altman

Stepping into a Microsoft building, Altman will be working on future innovations as he would be free from some of the tensions of tackling stakeholders who question his moves. As a boss, Nadella probably wants him to make more money while his previous Board were concerned about the safety of the technology itself. 

tude to do what he wants at Microsoft or end up as a glorified product manager if and when questions are raised by stakeholders on how investor funds are being spent. For, the world knows that every query on ChatGPT is unprofitable, with OpenAI losing a whopping $540 million just last year. 

But, there’s a silver lining for Altman, who was hoping to raise $100 billion over the next few years to fund OpenAI. However, Microsoft is sitting on cash reserves of $143 billion right now. Which is what Altman may be using to get a large bunch of extremely talented engineers from his old company into the new one.