"OpenAI Incident" MS Saves Altman and Emerges as Biggest Winner in 'Twist'... Who Is the Loser?

AI Industry Divided by Wins and Losses... OpenAI the "Biggest Loser"

Sam Altman, the former CEO of OpenAI known as the 'father of ChatGPT,' headed to Microsoft (MS) on the 20th (local time), leading MS to be regarded as the biggest winner in the recent OpenAI CEO dismissal saga. The AI industry, which has shaken the world this year, is experiencing a shake-up due to OpenAI's 'dramatic drama,' resulting in clear winners and losers in this incident.

Sam Altman, former CEO of OpenAI
[Photo by AFP Yonhap News]

MS, effectively acquiring OpenAI?..."Securing technology and strategy without regulation"

Satya Nadella, CEO of MS, wrote on his X (formerly Twitter) account that day, "I am very excited to share the news that Sam Altman and Greg Brockman (former OpenAI board chairman and co-founder) will join MS with their colleagues to lead a new AI research team."

Industry experts evaluated that after three days of chaos following OpenAI's board announcement of Altman's dismissal on the 17th, the situation was settled with Altman moving to MS, making MS the biggest beneficiary. Until the day before, there was an assessment that if Altman left OpenAI, MS?whose generative AI strategy is largely aligned with OpenAI?would be the biggest loser, but the situation reversed in just one day.

MS has invested a total of $13 billion (about 17 trillion KRW) in OpenAI since 2019, holding a 49% stake as the largest shareholder. However, since OpenAI is governed by a nonprofit board and has other investors, MS did not fully own or control OpenAI.

However, after Altman's move to MS was decided, more than 700 OpenAI employees demanded the resignation of all OpenAI board members, declaring they would join MS otherwise, completely changing the situation. MS directly employed OpenAI's core technical team, including Altman. Foreign media reported that Jakub Pachocki, head of GPT-4, Simon Sidor, a key OpenAI researcher, and Mira Murati, OpenAI's CTO who played a decisive role in developing ChatGPT, could be included in the MS AI team under Altman.

Satya Nadella, CEO of Microsoft (MS)
Photo by Getty Images Yonhap News

If OpenAI suffers damage from this incident, MS may incur some losses on its OpenAI investment. Nevertheless, IT media TechCrunch evaluated, "MS has secured the core leadership's technology and strategy without having to fight many regulatory hurdles that would arise if it were to acquire the entire OpenAI company," adding, "MS obtained early what it would later have to buy at a much higher price and with much more regulatory resistance."

The NYT reported, "No one achieved a turnaround like Nadella last weekend," stating, "MS was able to recruit Altman and talented OpenAI researchers and effectively owns 100% of the new AI research institute that any Silicon Valley venture capitalist would line up to invest in."

Wedbush Securities technology analyst Dan Ives also analyzed that "with Altman and Brockman operating AI at MS, MS is now in a stronger position in AI development."

The 'biggest loser' is OpenAI... Investors excluding MS also 'in tears'

OpenAI, which faced a crisis of collapse after most employees resigned following Altman's dismissal, became the biggest loser in this incident. With all founders gone, the company’s new funding efforts stopped entirely after Altman's departure.

Employees were reportedly angry not only about Altman's sudden dismissal but also about the cancellation of the ongoing employee stock ownership plan. The disclosed size of the employee stock sale was $1 billion (about 1.2983 trillion KRW). This was an opportunity for employees to cash out their shares at a high price, but as the company's value plummeted, selling shares became difficult.

[Image source=Reuters Yonhap News]

TechCrunch described, "With the shocking board decision to oust Altman, OpenAI is in the process of complete collapse." The NYT also reported, "The clear loser in this incident is OpenAI itself," noting that the best leader disappeared and employee morale plummeted.

Investors in OpenAI other than MS also became losers. The NYT said, "Most investors are technological optimists who believe AI will be a complete benefit to society," adding, "They liked Altman's fundamental optimism about the future of AI." It further noted, "The only way for them to invest in Altman's new company is to buy MS stock."

U.S. media analyzed that whether Altman's departure from OpenAI will benefit or harm other companies competing in generative AI development remains unclear. If companies like Google or Meta can poach key personnel leaving OpenAI, they may gain some advantage.

However, the situation where Altman joins and competes with MS is not welcome for these companies. Also, since Altman is no longer bound by OpenAI's constraints emphasizing cautious AI development, he can move faster. Experts predict this will pose a greater threat to competitors.

This content was produced with the assistance of AI translation services.