Has Microsoft just bought OpenAI by stealth?

Microsoft has hired former OpenAI CEO Sam Altman and co-founder Greg Brockman, following a tumultuous weekend at the AI firm.

Altman was surprisingly fired by the OpenAI board on Friday, after the company alleged that he “was not consistently candid in his communications” with the board. Brockman quit in protest at the decision, reportedly along with many other OpenAI employees.

Yesterday, it appeared a rapprochement was underway, with Altman in discussions with the board about resuming his role as CEO. However, talks broke down and OpenAI moved quickly to appoint Twitch co-founder Emmett Shear as its interim CEO. This happened just a day after appointing Mira Murati, the company’s chief technology officer, as the interim boss. That was three CEOs in three days, for those who like to keep count.

Now, it seems Microsoft – which has bet the farm on OpenAI’s technology – has moved quickly to prevent Altman and Brockman being poached by its rivals. Microsoft has created a new AI research team over the weekend, which Altman, Brockman and other ex-OpenAI staff will lead.

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A takeover in all but name?

Microsoft’s move certainly gives the impression it’s launched a hostile takeover of OpenAI in all but name, although Microsoft boss Satya Nadella tried to smooth things over in a tweet announcing Altman’s hire this morning.

“We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners,” Nadella tweeted.

“We look forward to getting to know Emmett Shear and OAI’s new leadership team and working with them. And we’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team. We look forward to moving quickly to provide them with the resources needed for their success.”

Altman quote-tweeted Nadella’s statement, merely adding “the mission continues”.

To which Nadella replied: “I’m super excited to have you join as CEO of this new group, Sam, setting a new pace for innovation. We’ve learned a lot over the years about how to give founders and innovators space to build independent identities and cultures within Microsoft, including GitHub, Mojang Studios, and LinkedIn, and I’m looking forward to having you do the same.”

Microsoft and OpenAI: joined at the hip

Even with OpenAI’s senior executives on board, it won’t be easy for Microsoft to simply replicate what OpenAI has already achieved. It takes many months and huge resources to train the large language models (LLMs) that AI relies on, and that intellectual property will of course remain with OpenAI, even if it’s staff don’t.

However, without the senior leadership and many of the staff that have propelled OpenAI to become arguably the most important AI company in the world, it does make the company more vulnerable to a full takeover bid from Microsoft. Do not be the least bit surprised if we see Microsoft move quickly to seal the deal in the days ahead, before rivals exploit the opportunity.

Microsoft’s fleet of AI services, including Windows Copilot, Microsoft 365 Copilot and GitHub Copilot are all based on OpenAI’s GPT-4. Although Microsoft will doubtless have long-term licensing deals in place, it would desperately want to avoid OpenAI falling into rivals’ hands. Let the bidding war begin.

NEXT: Read our full guide to Microsoft 365 Copilot, written by a Microsoft MVP.

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Barry Collins

Barry has 20 years of experience working on national newspapers, websites and magazines. He was editor of PC Pro and is co-editor and co-owner of BigTechQuestion.com. He has published a number of articles on TechFinitive covering data, innovation and cybersecurity.