News Analysis
Editor's note: The drama continued after hours on Nov. 21. The tweet below reflects the most recent status as of 8am ET Nov. 22:
:heart::saluting_face::heart: https://t.co/n1x47m5bTZ
— Sam Altman (@sama) November 22, 2023
(original article continues below)
The turmoil continues at OpenAI following the surprise sacking of CEO Sam Altman on Nov. 17. At the time of writing, 747 of the 770 OpenAI employees have threatened to quit to join Microsoft's newly announced AI research team, which Altman and former OpenAI president and co-founder Greg Brockman will reportedly lead.
A Wild Few Days at OpenAI
Venture funds may also jump into the fray, with the Financial Times reporting legal action could come as soon as today with the goal of reinstating Altman and shaking up the OpenAI board. As of Monday night, the board was holding firm on its decision to fire Altman, in spite of increasing external and internal pressure.
OpenAI chief scientist, co-founder and board member Ilya Sutskever very publicly retracted his participation in Altman's firing by signing the employee letter to the board and taking to X to apologize.
I deeply regret my participation in the board's actions. I never intended to harm OpenAI. I love everything we've built together and I will do everything I can to reunite the company.
— Ilya Sutskever (@ilyasut) November 20, 2023
Despite Microsoft CEO Satya Nadella welcoming Altman and Brockman to the firm, the Verge, citing sources close to the events, report the move remains in limbo while the two watch for any changes with the OpenAI board that would make it possible for them to return.
Nadella all but confirmed this in a streamed Bloomberg interview on Nov. 20, saying that Microsoft would stick with OpenAI regardless of where Altman lands. "We want to partner with OpenAI and we want to partner with Sam so irrespective of where Sam is, he's working with Microsoft," Nadella said. His statement echoed his previously released statement on the matter:
"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’s response aims to reassure investors and customers, given the company's $13 billion investment in OpenAI and the fact it developed its workplace generative AI Copilot strategy around the OpenAI technology.
Related Article: OpenAI Lets Everyone Build Their Own ChatGPT and Turbo Charges GPT-4
What Does All This Mean for Microsoft?
If Altman and the disgruntled employees make the move to Microsoft, it would give Microsoft approximately 90% of OpenAI’s key staff, Amalgam Insights' Hyoun Park told Reworked.
“This would lead to a situation where Microsoft basically has access to all of the operational staff, including chief scientist Ilya Sutskever and CTO Mira Murati, who were deeply involved in bringing GPT and related technologies to market,” he said.
"The most important thing here in respect of Copilot will be Microsoft licensing agreements with OpenAI and how they are affected by this mess," he said. “The most important aspect for Microsoft right now is very tactical and operational: making sure that GPT and related technologies stay up and running."
Nadella took a mini-public relations tour on Monday night to reassure anyone involved that the company's agreement with OpenAI was airtight.
"If tomorrow OpenAI disappeared I don't want any customer of ours to be worried about it ... because we have all of the rights to continue innovation — not just to serve the product — but we can just go and do what we were doing in partnerships by ourselves. We have the people, we have the compute, we have the data, we have everything," he told Kara Swisher.
Park thinks OpenAI is too big to fail for Microsoft. “The only question now is to figure out how much of a role Microsoft will play in owning the technology, being represented on the board, and maintaining the technology going forward,” he said. After this disaster of a weekend, Microsoft will be sure to control its AI future going forward.
From a broader perspective, Park believes these events will shake up the generative AI market and provide new opportunities for Anthropic, Cohere, Google and other open source options. He also anticipates closer scrutiny of boards and corporate missions of AI vendors will happen to ensure they align with their customers; goals.
Disrupting AI Development, But With Long-Term Positive Results
The most obvious short-term impact would be a disruption in focus, potentially affecting ongoing projects and partnerships, said Christian Buckley, NA and APAC director of partner management at Rencore and a Microsoft regional director and MVP.
Over the long term, the shifts at OpenAI could significantly influence the direction of AI research and development, potentially realigning it with Microsoft's strategic objectives.
“I believe it would strengthen Microsoft's competitive position in the AI space, leveraging insights and innovations from OpenAI. It also presents an opportunity for Microsoft to play a pivotal role in shaping ethical AI development and governance standards within the industry,” he said.
The real concern to Buckley is how the changes could alter market dynamics. Microsoft would face the challenge of managing new governance structures and ensuring the ethical development of these technologies. It would also necessitate a strategic approach to explore new partnerships and opportunities within the evolving AI ecosystem — something that was better suited for a neutral entity like OpenAI, he continued.
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For the workplace, Buckley believes the changes could go two ways: they could potentially disrupt Copilot and its related products' development pipeline and introduce uncertainties regarding updates and feature enhancements. But given Microsoft's long involvement with OpenAI and the potential formation of an Altman and Brockman led advanced AI research team, he sees it as also accelerating advancements and improvements in Microsoft Copilot. The direction will be decided in part based on where Altman and Brockman land.
Should OpenAI unravel, Microsoft Copilot could face significant shifts in its development trajectory, he continued. It would come down to the strength of the legal and intellectual property protections within the partnership agreement. In these circumstances, he said, Microsoft would need to navigate the complexities of its agreements with OpenAI to determine how to continue using or adapting the technology.
“I'm confident that Microsoft's robust internal AI capabilities and resources would allow it to quickly absorb key talents and assets from OpenAI, strengthening its AI strategy and compensating for the loss of OpenAI's input,” he said.
An additional upside Buckley sees is the events of the last few days might lead to a healthier, more diversified market in the long run, with an increased emphasis on ethical development, governance and risk management in the generative AI domain.
Related Article: Microsoft 365 Copilot Is Now on General Release. Are Your Permissions in Order?
OpenAI Loses Its Lead?
OpenAI blazed the trail in proving that transformer technology was a major path forward with AI, Constellation Research's Dion Hinchcliffe told Reworked. The drama around OpenAI's leadership therefore will not impact the fundamental approach of large language models and their power to collate and synthesize knowledge in a far more actionable way, he continued.
What the last few days have proven is that we are still in a very early market when it comes to AI vendors, he said. “OpenAI has likely squandered a good part of its vital 1-2 year lead in the turmoil that has ensued. In short, it's good for their competitors and creates new openings in the industry.”
Technology companies will now hedge their bets on which AI foundation they commit to, he said. Model and AI engine choice was always going to be important in the long-term, so this will accelerate flexibility in product architectures that incorporate external AI systems, especially for digital workplace tools, he continued.
When asked about Copilot specifically, Hinchcliffe was optimistic. “The overall vision for Copilot as a side-by-side assistant to digital workers, which I assess as compelling and directionally sound, will not be much impacted by these events." Hinchcliffe expects that Microsoft already has several contingency plans in place should OpenAI implode, from securing the underlying IP for themselves to having a backup AI foundation ready to go.
With generative AI's now well-established, Hinchcliffe sees no reason for companies to stop investing in the technology. “But vendor decisions will likely now be made differently going forward, with a view more to spreading out risk, diversifying tech and preserving choice,” he said.