Down the drain: OpenAI foils Microsoft’s plan, won’t offer them, other investors seat on board

OpenAI, the organization behind the widely known ChatGPT, is expected to exclude Microsoft, as well as other investors such as Khosla Ventures and Thrive Capital, from obtaining seats on its new board, according to a report by Reuters.

The recent turmoil within OpenAI unfolded when the CEO and founder, Sam Altman, was abruptly ousted last week without a detailed explanation, causing concern among investors and employees. Altman was later reinstated with the commitment to establish a new board, adding to the uncertainty surrounding the future of the AI-focused startup.

Thomas Hayes, the chairman of hedge fund Great Hill Capital, expressed scepticism about whether OpenAI would choose to leave Microsoft off the board. He emphasized that Microsoft, a major financial supporter with over $10 billion invested in OpenAI, is likely to have a say in the matter. Hayes suggested that it would not be in Microsoft’s interest to remain passive in board decisions.

The Information initially reported the development, stating that OpenAI is expected to form a nine-person board. The three initial directors of this new board — Chair Bret Taylor, former Treasury Secretary Larry Summers, and Quora CEO Adam D’Angelo — are anticipated to be confirmed as early as this week, according to the Reuters report.

Adam D’Angelo would be the sole remaining director from the previous six-person board that dismissed Sam Altman. Microsoft, a major financial contributor to OpenAI, has played a crucial role in the organization’s operations, particularly in the development of ChatGPT, the viral generative AI chatbot.

Satya Nadella, CEO of Microsoft, had previously noted on CNBC that governance changes were necessary at OpenAI, irrespective of Altman’s position within the organization. Microsoft’s response to questions regarding the OpenAI board indicated a wait-and-see approach, with a spokesperson stating, “We will wait until the board officially says something.”

(With inputs from agencies)