Microsoft (MSFT.O) emerged on Monday as the big winner of the upheaval at OpenAI, hiring ousted CEO Sam Altman and other key staff of the startup to avert a potential flight to rivals and help deepen its lead in the artificial intelligence race.
The turmoil at OpenAI since Friday had raised fears about the fallout for Microsoft, which has pumped in billions of dollars and uses the pioneer’s technology for most of its AI offerings such as its Copilot AI assistant.
The move ensured “the golden child of AI” will stay with Microsoft, analysts said, as the company competes with Alphabet (GOOGL.O)-owned Google to dominate the nascent industry.
Microsoft’s shares rose as much as 2% to a record high before paring some of the gains. The company was on track to add nearly $30 billion to its market value at current levels. That was close to the valuation OpenAI commanded in its last fundraise.
Altman will lead a new research team at the software giant following his surprise ouster that shocked the tech industry. He will be joined by Greg Brockman, another OpenAI cofounder, as well as other researchers including Szymon Sidor.
“Microsoft has been able to turn a crisis into an opportunity with the hiring of Sam Altman and Greg Brockman,” said Gil Luria, senior software analyst at D.A. Davidson.
“Assuming they will be able to hire many more from the OpenAI team, they will have taken over the key development path for artificial intelligence.”
About 500 employees of the startup also threatened to leave unless the board stepped down and reinstated Altman, as well as Brockman, according to a letter reviewed by Reuters.
“Your actions have made it obvious that you are incapable of overseeing OpenAI,” the employees said on Monday in the letter, adding, “Microsoft has assured us there are positions for all OpenAI employees at this new subsidiary should we choose to join.”