Microsoft executives got the official word just minutes before the announcement that Sam Altman, co-founder and CEO of OpenAI and one of Microsoft’s biggest investments, was forced out of the company on Friday afternoon. They were the lucky ones.
Over at OpenAI, the staff figured it out when the rest of the tech world knew it. Shortly after 12:30 p.m. Pacific Time, the company released a strongly worded statement announcing that Altman was no longer there and that its CTO, Mira Murati, would immediately replace him on an interim basis.
The announcement left employees at OpenAI and Microsoft “completely shocked,” employees at both companies told Business Insider. There was a brief meeting at OpenAI headquarters in San Francisco where the public statement was reiterated and a call for calm was made.
People at the company were happy that at least Ilya Sutskever, chief scientist, co-founder and board member of OpenAI, was still with them. He has been a respected leader at the company for years and has been “responsible” for the technical work for some time, the OpenAI person 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 “retired” due to Altman’s ouster. In an email also sent to According to the company’s statement, Brockman was previously removed as OpenAI chairman.
One person in the AI field who doesn’t work at OpenAI but knows many people at the company called the sudden executive shakeup “one for the history books.” He compared Altman’s ouster to Apple’s firing of Steve Jobs in 1985 after he clashed with the then-CEO.
OpenAI and Microsoft insiders agreed that the move was sudden. But Microsoft says it stands by its partner’s new market leader. “We have a long-term agreement with OpenAI with full access to everything we need to deliver our innovation agenda and an exciting product roadmap. We 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 that all was not well with OpenAI’s business, a Microsoft official told BI, which Microsoft reportedly backed with at least $10 billion.
“I think the value is huge and there are some good things around AI, but the reality is that for economic reasons here you have to charge more than $30 for AI capabilities to cover the underlying infrastructure costs “I need to pay for a productivity tool,” the Microsoft employee said.
“OpenAI will have to constantly spend billions on training the models in addition to the inference costs,” the person added.
OpenAI did not immediately respond to a request for comment.
Nadella’s statement also referenced the company’s recent technology conference to confirm how committed it remains to AI: “As you saw at Microsoft Ignite this week, we continue to rapidly innovate for this age of AI, with over 100 announcements.” across the technology space.” Stack of AI systems, models and tools in Azure up to Copilot. Most importantly, we are committed to providing our customers with all of this while building for the future.”
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