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Business News/ Companies / News/  Microsoft unlikely to get a seat on OpenAI board, experts say Satya Nadella's company won't ‘sit passively’
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Microsoft unlikely to get a seat on OpenAI board, experts say Satya Nadella's company won't ‘sit passively’

OpenAI is unlikely to give a board seat to Microsoft and other investors, including Thrive Capital, Sequoia Capital, and Khosla Ventures, despite their significant investments in the company.

FILE PHOTO: OpenAI logo is seen in this illustration taken, February 3, 2023. REUTERS/Dado Ruvic/Illustration/File Photo (REUTERS)Premium
FILE PHOTO: OpenAI logo is seen in this illustration taken, February 3, 2023. REUTERS/Dado Ruvic/Illustration/File Photo (REUTERS)

ChatGPT maker OpenAI is unlikely to offer a board seat to Microsoft and other investors in the company, including Thrive Capital, Sequoia Capital and Khosla Ventures, many of whom played a pivotal role in forcing the artificial intelligence startup to reconsider its decision to fire Sam Altman as CEO.

The six-day fiasco at OpenAI saw the company sack its most public face, and perhaps that of the AI industry, before reversing its decision and rehiring the 38-year-old to lead the company. In addition, OpenAI also let go of the board that was responsible for ousting Sam Altman as CEO, with the exception of Quora CEO Adam D'Angelo.

While Altman got his old job back, he did not get a seat back on the company's board as part of the negotiations to return to the AI startup, although some reports at the time suggested that the tech entrepreneur might get his seat back in due course.

Microsoft's unusual relationship with OpenAI: 

While Satya Nadella's Microsoft is OpenAI's biggest backer and even uses the AI startup's technologies in many of its products, such as Bing chat and Windows copilot, the Redmond based company has virtually no influence over its counterpart due to the AI startup's unusual governance structure.

Microsoft has invested over $10 billion in OpenAI and holds a 49% stake in the company, and would have hoped to get a seat on the newly formed OpenAI board, but a recent Reuters report suggests that's unlikely to happen.

 Hedge fund Great Hill Capital's CEO Thomas Hayes while speaking to Reuters said, “I do not know that it's going to be the choice of OpenAI to leave Microsoft off the board,"

"Microsoft will have something to say about it, given the amount of money that they have put behind them," Hayes added while noting that it won't be in Microsoft's interest "to sit passively".

OpenAI's new board: 

According to a report from the Information, OpenAI's new board hasn't officially met yet and things could change later, but the AI startup's refusal to give its investors a seat on the board would suggest it wants to prioritise security practices over investor returns.

 

 

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Published: 29 Nov 2023, 07:16 AM IST
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