Microsoft to Appoint Sam Altman CEO of New In-House AI Team

(Bloomberg) -- Microsoft Corp. said that Sam Altman will lead the software developer’s new in-house artificial intelligence team after the OpenAI co-founder was ousted from his startup last week, a bid to shore up Microsoft’s AI plans and reassure investors.

Greg Brockman, an OpenAI board member and co-founder who also left the company last week, will join Altman and Microsoft will “move quickly to provide them with the resources needed for their success,” the Redmond, Washington-based company’s Chief Executive Officer Satya Nadella said in a post on LinkedIn. In another post on X, formerly Twitter, Nadella said Altman will serve as CEO of the new in-house group.

The move, at midnight local time on Sunday, was the latest in a dramatic three days for Microsoft and OpenAI’s relationship, a backup plan for Nadella after his efforts to restore Altman and Brockman to OpenAI were thwarted. The OpenAI board named former Twitch chief Emmett Shear as CEO. Nadella wrote that Microsoft looks forward to getting to know Shear and working with him.

“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 said on LinkedIn.

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The Microsoft chief has been revamping his company’s entire product lineup around OpenAI’s technology and has put $13 billion into the startup, making Microsoft by far its biggest shareholder with a roughly 49% stake.

Still, Microsoft was shocked Friday when it received just a few minutes notice that the board had ousted Altman, who enjoys a close relationship with Nadella. The news sent Microsoft shares down amid concern that upheaval at OpenAI could adversely impact Microsoft’s entire AI strategy. They reversed course and rose as much as 2.7% in premarket trading Monday after Nadella’s announcement.

Microsoft executives were also surprised Sunday by Shear’s appointment, as they had expected they would be able to get OpenAI’s board to back down and allow Mira Murati, who had been appointed interim CEO, to return Altman and Brockman to the company in some capacity, said people familiar with the company’s thinking. They asked not to be named discussing private deliberations.

It’s not yet clear who or how many former OpenAI workers may join Microsoft — Nadella said colleagues of Altman and Brockman would follow — nor how Microsoft will balance its ongoing commitment to OpenAI against its own new Altman-led AI group. Nadella offered LinkedIn and GitHub as examples of Microsoft-owned businesses that operate with “independent identities and cultures” and their own CEO.

Microsoft has worked for more than 20 years on its own AI research. Its move to rely heavily on OpenAI technology and give that company vast computing resources, in some cases over homegrown projects, has caused some tension with those working on AI in-house. While some long-time Microsoft AI hands have left the company, moving Altman and Brockman into Microsoft could cause some further consternation.