OpenAI and Microsoft employees ‘shocked’ by Altman’s ouster

OpenAI and Microsoft employees ‘shocked’ by Altman’s ouster

Microsoft leaders officially received only a few minutes’ warning before announcing that Sam Altman, co-founder and CEO of OpenAI and one of Microsoft’s largest investments, had been forced to leave the company on Friday afternoon. They were the lucky ones.

At OpenAI, employees discovered it just as the rest of the technology world did. At shortly after 12:30 PM PT, the company released it announced a strongly worded statement that Altman was out and that its CTO, Mira Moratti, was to replace him immediately on an interim basis.

The announcement left those at OpenAI and Microsoft “completely shocked,” people inside the companies told Business Insider. There was a brief meeting at OpenAI’s headquarters in San Francisco, where the general statement was reiterated and calm encouraged.

Insiders were happy to at least have Ilya Sutskever, OpenAI’s chief scientist, co-founder and board member, with them. The person at OpenAI said he had been a respected leader at the company for years and had been “in charge” of the technology work for some time.

Acceptance was short-lived. Another shock came about an hour later when Greg Brockman, co-founder and president of OpenAI, announced that he had “resigned” over Altman’s ouster. He told staff in an email, also sent to X, that he did so “based on today’s news.” Brockman was previously removed as president of OpenAI, according to a company statement.

One AI person, who doesn’t work at OpenAI but knows several people at the company, called the sudden executive change “one for the history books.” He compared Altman’s forced resignation to when Steve Jobs was fired from Apple in 1985 after a dispute with its then CEO.

Those at OpenAI and Microsoft agreed that the move was surprising. But Microsoft says it stands by its partner’s new leader. “We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and exciting product roadmap; we remain committed to our partnership, to Mira and the team. Together, we will continue to deliver benefits,” Microsoft CEO Satya Nadella said in a statement. This technology is great for the world.

There may have been signs that all was not well when it came to the OpenAI business, one Microsoft employee told BI, which Microsoft has reportedly backed with at least $10 billion.

“I think its valuation is tremendous, and there are some good things happening around AI, but the reality is that the economics here are that you need to charge $30+ for AI features to deal with the underlying infrastructure costs, which is double or more than anyone currently has,” the employee said. Microsoft: “Pay for a productivity tool.”

“OpenAI will also continually need to spend billions to train models, in addition to the cost of inference,” 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 validate its commitment to AI: “As you saw at Microsoft Ignite this week, we continue to innovate rapidly for this age of AI, with more than 100 announcements across the entire technology spectrum.” “From the AI ​​systems, models and tools in Azure to Copilot. Most importantly, we are committed to delivering all of this to our customers while building for the future.”

Are you an OpenAI employee or someone with advice or insight to share?

Contact Kali Hays at khays@insider.com, on our secure messaging app Signal at +1-949-280-0267, or via Twitter DM at @hayskali. Communicate using a non-work device.

Are you a Microsoft employee? Do you have an idea to share?

Contact reporter Ashley Stewart via encrypted messaging app Signal (+1-425-344-8242) or email (astewart@insider.com).

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