Microsoft wants a bigger board for OpenAI, discussing governance changes to reinstate Sam Altman

Microsoft is actively discussing governance changes with OpenAI’s board, aiming to enhance its structure and prevent unexpected strategic moves. OpenAI recently fired CEO Sam Altman, leading to investor calls for his reinstatement, with Microsoft open to his return under specific conditions. The software giant is seeking to address perceived governance issues that led to Altman’s dismissal.

Proposed changes may involve expanding the board size and raising the experience threshold for members, sources familiar with Microsoft’s considerations revealed on condition of anonymity. Microsoft, as OpenAI’s major investor, is contemplating reinforcing its existing deal, which mandates board approval for mergers.

The recent attempt by the OpenAI board to merge with Anthropic did not involve Microsoft’s approval, prompting the company to enhance protections and broaden scenarios where it has veto or notification rights.

Having invested approximately $13 billion in OpenAI, Microsoft is awaiting the emergence of a new board to initiate discussions on governance changes. Negotiations between Altman, OpenAI board members, and interim CEO Emmett Shear are underway to explore the possibility of Altman’s reinstatement.

Implementing changes as desired by Microsoft is expected to be a part of the evolving process following the resolution of Altman’s return and the fate of the current board.

Microsoft CEO Satya Nadella emphasized the need for significant governance changes at OpenAI, regardless of whether Altman returns or assumes a role overseeing a new AI research unit at Microsoft.

Nadella expressed dissatisfaction with the lack of prior notification from OpenAI’s board regarding Altman’s termination.

In an interview with Bloomberg Television, Nadella stated, “Surprises are bad, and we just want to make sure things are done in a way that will allow us to partner well.” He stressed the importance of changes occurring in collaboration with Microsoft to avoid unexpected developments.

Microsoft is also considering the possibility of placing one of its executives on OpenAI’s board. However, the company will carefully weigh the desire for increased control against potential regulatory challenges that may arise from direct involvement in the startup, according to sources familiar with Microsoft’s thinking.

A Microsoft spokesperson declined to comment on the matter. The Information reported on OpenAI’s outreach to Anthropic on Monday.

(With input from agencies)