Sam Altman and his Open AI startup CHAT GPT: A case study on the impact of Microsoft’s investment in OpenAI and its cloud

He was fired as CEO and the board removed the president of the company from the position of chairman at a time when they were trying to save the company. But the bylaws Altman and his cofounders initially established and a restructuring in 2019 that opened the door to billions of dollars in investment from Microsoft gave a handful of people with no financial stake in the company the power to upend the project on a whim.

An attempt to restore Altman as CEO and replace the board ran into difficulty Sunday over the role of existing directors in choosing their replacements, Bloomberg reported.

Nathan Benaich, general partner of Air Street Capital and coauthor of the “State of AI Report,” says OpenAI’s corporate structure has proven to be at odds with the need to support cutting-edge research through huge amounts of equity investment. “It was an experiment to defy the laws of corporate physics, and it appears that physics won out,” he says.

When Sam Altman, along with others, formed a startup called CHAT GPT, he told Vanity Fair he didn’t have any experience with nonprofits. “So I’m just not sure how it’s going to go,” he said.

It’s thought that Microsoft still has an investment in Openai of around $10 billion. Microsoft is the exclusive cloud partner for OpenAI, and Microsoft’s cloud services power all OpenAI workloads across products, API services, and research.

Altman and OpenAI had been working with Microsoft to refine and test the Maia AI chip. Microsoft was quick to downplay its the chip’s impact on its close Nvidia partnership, but the Maia GPU is part of a series and the company is already working on a second generation.

A new advanced intelligence research team has been formed by Microsoft. It comes just a week after Microsoft announced it has built its own custom AI chip that can be used to train large language models and potentially avoid a costly reliance on Nvidia. Microsoft has built it’s own Arm based processor for the cloud. Both custom silicon chips are designed to power its Azure data centers.

After hours, Microsoft’s CEO Satya Nadella announced that he and Greg Brockman would be joining the tech giant to head an advanced artificial intelligence research team.