Microsoft Secures Observer Role on OpenAI’s New Board
In an effort to enhance its corporate governance, OpenAI, the generative AI start-up, has announced that Microsoft will have a role on its new board. This move comes after a week of turmoil, during which five out of six directors, including CEO Sam Altman, either resigned or were ousted.
Alongside other individuals who have diverse experience in technology, safety, and policy, Microsoft will serve as a non-voting observer on OpenAI’s new board. This marks a significant milestone for the tech giant, as it has been a key investor in OpenAI, having committed over $10 billion in exchange for a substantial minority stake.
The restructuring of OpenAI’s board follows a period of chaos that raised concerns about the company’s valuation and its unique corporate structure. Under this structure, a not-for-profit board controls the for-profit entity, a model that has attracted attention and scrutiny.
OpenAI was previously hailed as one of Silicon Valley’s most promising start-ups, with plans for an employee stock sale that would value the company at $86 billion. However, the sudden departure of Altman and co-founder Greg Brockman from the board on November 17 threw the company into disarray.
In response to pressure from employees and investors, the remaining board members reversed their decision, leading to Altman and Brockman’s reinstatement just four days later. As part of the agreement, three of the remaining directors, including Tasha McCauley, Helen Toner, and Ilya Sutskever, left the board.
Adam D’Angelo, the CEO of Quora, is now the sole member of the original six-person board. Together with former US Treasury secretary Larry Summers and former Salesforce CEO Bret Taylor, D’Angelo forms a transitional board of three members.
Altman and Brockman will resume their roles as CEO and president, respectively, but will not regain their seats on the board. This was one of the conditions set by the departing directors, along with an independent investigation into the events surrounding Altman’s abrupt removal.
The situation regarding Sutskever’s future with OpenAI remains uncertain. Altman expressed his admiration for Sutskever, describing him as a guiding light and expressing hopes for continued collaboration.
OpenAI is actively working to expand its board, which started the year with nine members. The focus now is on stabilizing the company, establishing a qualified and diverse board, and enhancing governance procedures. Once these tasks are completed, Bret Taylor intends to step away and entrust the oversight of OpenAI to his fellow board colleagues.
This latest development signifies a significant step for Microsoft’s involvement in OpenAI. As both companies collaborate on the future of artificial intelligence, Microsoft’s observer role on the board reflects the deepening partnership and the shared commitment to advancing the field while ensuring responsible and effective governance.
In conclusion, the addition of Microsoft as a non-voting observer on OpenAI’s new board comes as the start-up seeks to strengthen its corporate governance following a period of turmoil. With the involvement of key partner Microsoft and the ongoing efforts to reconstitute the board, OpenAI aims to navigate the challenges and uncertainties lying ahead and reaffirm its position as a leading player in the field of artificial intelligence.
