OpenAI announced late Friday that Chief Executive Sam Altman is stepping down, saying the company's board "no longer has confidence in his ability" to lead the AI startup backed by Microsoft. Expanding ties with OpenAI have spurred customer gains at Microsoft's cloud computing business, boosting MSFT stock.
"Mr. Altman's departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities," the company said in a blog post.
Altman will be replaced on an interim basis by Chief Technology Officer Mira Murati. The company had also announced that OpenAI co-founder and president, Greg Brockman will be stepping down as board chair but will remain the company. But Brockman later announced in a social media post that he was also leaving the company.
MSFT Stock Jumps In 2023 Amid AI Boost
News of Altman's departure caps a momentous year for OpenAI. The startup rocked the technology world with the introduction of ChatGPT in Nov. 2022. The chatbot became an instant hit, triggering a frenzy over AI.
"The implications of this earthquake in Silicon Valley are being felt across the tech landscape as Altman is the golden child of the AI world and a key to getting ChatGPT and OpenAI to its current state," said Wedbush analyst Daniel Ives in a report. "(Altman) now goes from a friend to a potential foe for Microsoft and CEO (Satya) Nadella which were on the outside looking in last night when this news broke."
He added: "We would expect Microsoft now to exert more control of OpenAI given its importance and expect more disruption from a OpenAI board/company perspective over the coming months. This is the time for Microsoft to now essentially take this over strategically speaking.
Altman and Tesla founder Elon Musk started the company in 2015 as a nonprofit, research-oriented entity. Amid disagreements with Altman, Musk walked away from OpenAI in 2019.
In addition, the ChatGPT phenomenon also turned the spotlight on Microsoft. MSFT stock has jumped 54% in 2023.
Meanwhile, Microsoft reportedly has invested $13 billion in OpenAI and owns a 49% stake in the company.
Also, Microsoft is integrating AI "Copilot" technology into its Office productivity and cybersecurity software.
Will Google, Amazon Gain From Chaos?
Other tech giants, including Alphabet's Google and Amazon, have scrambled to beef up their AI arsenal.
Meanwhile, Google is readying a challenger to OpenAI's ChatGPT AI training model. Called Gemini, Google's next-generation AI model is due out in 2024.
"The big question now is will Amazon and Google use this near-term chaos to their advantage in the AI Game of Thrones with Microsoft/OpenAI with a stronghold on this market," said Ives.
However, the AI craze also sparked fears of the technology's potentially disruptive impact. In May, a group of technology leaders, including Altman, warned about the "risk of extinction" posed by AI.
In announcing Altman's exit, OpenAI's board affirmed its mission "to ensure that artificial general intelligence benefits all humanity."
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