4 min Analytics

‘OpenAI board is checkmated; Altman must return as CEO’

‘OpenAI board is checkmated; Altman must return as CEO’

The OpenAI saga is changing by the hour. We analysed all the public statements and leaked letters this morning, and there is only one possible outcome; Altman must return as CEO. The board has been checkmated by its own staff, by Satya Nadella the CEO of Microsoft and finally by co-founder Ilya Sutskever, who is partly responsible for Altman getting fired. If the board continues on its current course, nothing will remain of OpenAI.

A brief recap in this saga, on Friday Sam Altman was fired by the board of directors in a power struggle. Co-founder Greg Brockman was also removed from the board and decided to resign and join Altman.

Over the weekend attempts were made by Microsoft and other investors to pressure the board to take back Altman. That was unsuccessful, however, changes did take place in the board of directors, with Ilya Sutskever emerging as the winner. He is now the only remaining founder on the board and also chairman.

Microsoft brings in Altman and Brockman

Microsoft CEO, Satya Nadella, seeing his major investment in OpenAI go up in smoke, decided to fight fire with fire. Nadella struck a deal with Altman and Brockman that they get to build and lead a new advanced AI team at Microsoft. Anyone working at OpenAI is welcome to join Microsoft as well. With that, Nadella puts a lot of pressure on OpenAI’s board.

90% of OpenAI staff threatened to quit

However, it also gave the final push to OpenAI staff to revolt. OpenAI’s board of directors has received a letter signed by 700 of its 770 employees demanding that Sam Altman be reinstated as CEO and the entire board resigns. If that doesn’t happen, all 700 employees threaten to leave OpenAI. Most of them will likely go directly to work at Microsoft under the leadership of Altman and Brockman. Although it is clear that Salesforce is also actively hunting for OpenAI employees.

Nadella stated Altman may return to OpenAI

To prevent the board from saying that Altman is now working at Microsoft and can not return to OpenAI, Nadella has once again sent a clear message. He spoke with Bloomberg Television that Microsoft is the largest investor in OpenAI, and “irrespective of where Sam is, he’s working with Microsoft”. So Nadella is certainly keeping the door open for Altman’s return to OpenAI. Microsoft has invested heavily in OpenAI and everything it developed. There is a lot of IP and value still in OpenAI.

Ilya Sutskever expresses regret and also threatens to resign

Sutskever often clashed internally with Altman over OpenAI’s strategy and how the commercial and governance strategies were shaped. This eventually got out of control, and the board of directors and Sutskever initiated Altman’s resignation. Sutskever now claims to regret his participation in the board’s actions. He also states that he never intended to damage OpenAI and that he wants to do everything to reunite the company. Sutskever also signed the staff’s letter threatening to resign if the board does not step down, a board of which he is a member and chairman.

The board is checkmate

OpenAI’s board now seems to have few choices left. Continuing on the current path will wreck the company. With Sutskever, they already have mutiny within the board. Investors in OpenAI could lose hundreds of millions of dollars if the board continues on its current path, they are busy working with their lawyers to see if they can hold the board accountable.

Microsoft owns 49 percent of the shares in OpenAI and will no doubt regret that it didn’t demand more influence on the board. Nadella did, however, fight fire with fire, and has completely set the board of directors checkmate. Microsoft has played hardball to protect its investment, and if the board continues to wreck OpenAI, Microsoft does get all the knowledge and AI researchers to replace OpenAI.

That will result in a setback of generative AI development, which will probably take 6 to 12 months to fix. OpenAI will then become to AI what Netscape is to the internet.

The biggest loser in all scenarios is OpenAI, whatever happens, the company has taken a huge hit. Finally, we see no future for Sutskever. The current board wants to get rid of him, and if Altman returns, we can’t imagine Altman will want to keep him on board.

Read also: ‘OpenAI interested in merger with competitor Anthropic’