Why you should care about this week’s AI drama

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We've got quite a fun business story to discuss over our Thanksgiving turkeys this year.

Sam Altman was fired by the OpenAI board! He’s starting another company! Wait, the OpenAI board wants him back! No, it doesn’t! Microsoft (MSFT) is hiring him! OpenAI employees are revolting!

It’s got everything — big personalities; big companies; dramatic, fast-moving developments; and a technology that’s been both a buzzword and a driver of returns this year.

But the story also has real repercussions for investors and anyone who will be affected by artificial intelligence — that is, pretty much everyone.

First, let’s take the implications for investors, particularly those who hold Microsoft shares. As my colleague Josh Schafer outlined, many analysts are cheering CEO Satya Nadella’s move to bring Sam Altman fully into the fold after forging a relationship with him, both personal and financial. That’s reflected in Monday’s bounce in Microsoft shares, which initially fell on Friday on the news that Altman was departing OpenAI, in which Microsoft had invested.

This could potentially solidify what some see as Microsoft’s lead in AI. Through its collaboration with OpenAI, it has incorporated ChatGPT into its Bing search engine and other products. Now, by directly hiring Altman and one of his co-founders, Greg Brockman, “Mr. Nadella may have pulled off his own coup, acquiring the most important part of OpenAI — its ambitious talent,” wrote Macquarie analyst Frederick Havemeyer in a note to investors.

That could potentially leave some of Microsoft’s competitors in AI – particularly the likes of Alphabet and Meta – on the back foot.

On the other hand, they too could hire some of the OpenAI workers. (As of this writing, more than two-thirds of OpenAI’s employees had reportedly threatened to resign.) There’s also the wrinkle that Microsoft owns 49% of OpenAI, which is now in disarray, though Semafor has reported that it hasn’t yet wired the company its full investment.

So the stakes are high for Microsoft and its peers.

The much bigger question is what this means for the development of AI — a technology that this year has been touted as having the ability to change the way we work and live.

Reportedly, one of the points of contention between Altman and members of the board was how quickly to develop and commercialize new, AI-based technologies while still not posing a threat to humanity. That threat has been flagged by everyone from one of the “godfathers of AI” to Elon Musk to Sam Altman himself, along with a who’s who of AI luminaries.

Now that Altman is under the purview of a public company whose job is explicitly to make money for shareholders versus the nonprofit that controls OpenAI, whose “principal beneficiary is humanity, not OpenAI investors,” will he be more likely to brush aside those potential threats? Or was the mission statement a fig leaf anyway?

Will this newsletter be written by our AI overlords a year or five years from now as a result of this pivotal decision by OpenAI to fire Sam Altman, setting off a chain of events that will lead him to prioritize profit over prudence and lead to humanity’s downfall?

Probably not. But it still reminds us of a specter hovering over all of this AI hype — the power over this technology with the huge potential to shape our futures is concentrated in just a few hands.

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