Yesterday Sam Altman of OpenAI announced that it was back to business as usual (not that they missed many, if any steps) at OpenAI, the board has been re-constituted, and Microsoft now has a non-voting seat at the table. Further governance changes are forthcoming to prevent what happened from recurring, as well as an investigation into the events. What does this mean? OpenAI’s torrid pace of innovation will no doubt continue as it has, and the focus upon quickly commercializing new offerings will no doubt continue, as the pro-commercial factions seemingly won (especially when looking at the new board thus far).
Microsoft got one of the scenarios it wanted, which is OpenAI working at full-speed under Sam Altman with governance changes to prevent being blindsided. But, this was always going to happen. Microsoft would have emerged in this deal with a flavour of victory no matter what. I speak from the experience of having done complex partnerships with Microsoft from both sides of the table, during my time as a leader at the company and while at Ascentium (now SMITH Commerce).
In any partnership that can impact its customers, Microsoft is a master at protecting its customers from an intellectual property perspective. Microsoft has always had a license to all OpenAI IP present and future up through functioning artificial general intelligence. Microsoft always takes steps to protect the relationship through to end-customers.
Granted, they were caught unaware given OpenAI’s unusual governance model – but Satya and the executive team win a platinum medal for quickly pivoting to work around that by setting the stage over a weekend to effectively hire the majority of OpenAI’s executives and employees. And, the governance loophole has seemingly been closed.
As a technology leader, the choice of vendors DOES matter. In one of my last roles when working with ChatGPT, although OpenAI was used directly for research and prototyping, the plan for any customer offerings was always to use Azure OpenAI. The small lag-time and cost differentials were minor when compared to the data privacy, compliance, and lifecycle guarantees offered by Microsoft. The breaking change/discontinuation policy with only 30 days notice at the time was a deal breaker.
Hence, the moral of the story is that if an emerging technology one desires is available from the likes of Amazon, Google, or Microsoft – that is likely a far more solid story if mission criticality matters. This case proved it out, as Azure OpenAI customers were at all times immune from any of the drama of the last few weeks.