Satya Nadella: "We have all the rights and all the capability."

Microsoft CEO went on a podcast with Kara Swisher to talk about the diabolical events happening at OpenAI.

We're four full days into the OpenAI fiasco, and it still hasn't been made clear about what happened or why Sam Altman was fired. After the Friday events, Microsoft stepped in Monday to offer Altman and Greg Brockman a job at Microsoft to work on AI research. Then, a few hours later - Ilya Sutsever, believed to be one of the instigators, came out to say that he regretted his decision.

And shortly after that, the entire OpenAI team made an ultimatum to the board - "either resign, or we will leave". The letter that the OpenAI employees prepared initially had 500 signatures (out of 700~ employees), and recent reports say that that number is almost 100% now.

This is arguably the most shocking news story of the year (OpenAI leading the pack two years in row!), so naturally there is a lot of debate, speculation and arguments being presented. However, we still don't know for certain what is going on. Since the letter was proposed to the board, there has been no response from anyone at the OpenAI team. Bloomberg reports that some investors are considering lawsuits to make the situation right (whatever that means).

Not only that, it's gotten to the point where other CEOs are openly proposing offers to existing OpenAI employees. Marc Benioff, the CEO of Salesforce, posted on X earlier:

And things will progressively get worse for however long this keeps dragging on. The interim CEO, Emmett Shear, has not publicly commented on rectifying the situation since being appointed.

But this isn't just about OpenAI, the company.

This is also about the people and, more importantly, the 2 million developers who use the OpenAI API. Whether for personal purposes or business. There has been an enormous amount of self-made people on Twitter, Discord, and other social media platforms worrying that the world is about to come crashing down on the dreams that OpenAI has enabled them to accomplish.

"We have all the rights and all the capability."

As the situation continues to unfold, Satya Nadella, Microsoft's CEO, did some public speaking on the matter. Nadella spoke with Kara Swisher on Spotify, addressing several key points relevant to the current crisis.

Nadella emphasized Microsoft's deep involvement in AI development alongside OpenAI. Despite the upheaval, he reassured that Microsoft retains "all the rights and all the capability" necessary for AI innovation. This statement suggests a robust backup plan, ensuring the continuity of services and technologies developed in partnership with OpenAI.

Microsoft's investment in OpenAI, as Nadella highlighted, is not just financial but also includes significant contributions in terms of computing resources. This investment grants Microsoft substantial rights and a strong position in any future developments, regardless of OpenAI's internal changes.

The interview also touched on the potential absorption of OpenAI talent into Microsoft. As highlighted earlier, over 600 OpenAI employees are considering leaving unless the board resigns, Microsoft appears ready to welcome these AI experts, potentially under the leadership of Sam Altman in a newly formed advanced AI research team within Microsoft.

For the 2 million developers using OpenAI's API and the wider AI community, Nadella's statements offer reassurance. Microsoft's commitment and capability to continue AI development could mean stability and continuity for those relying on OpenAI's technologies.

While the OpenAI board and leadership crisis remains unresolved, Nadella's interview indicates that Microsoft is poised to play a crucial role in shaping the future of AI, potentially absorbing OpenAI's mission and talent into its own expansive ecosystem. This development could significantly influence the trajectory of AI research and application in the coming years.

The actual contract Microsoft has with OpenAI is not publicly available

As per this WSJ report back in June, the partnership between Microsoft and OpenAI is both highly impactful and complex, marked by mutual benefits and underlying tensions. While Microsoft's significant investment has afforded it early access to every product that OpenAI develops, the company deliberately kept its stake at 49%, likely to sidestep antitrust concerns.

Internally, this partnership has not been without its challenges. Microsoft has faced internal criticisms over decreased investment in its in-house AI development and limited access to the core aspects of OpenAI's technology for most of its employees. Despite the significant investment and collaboration, most Microsoft employees interact with OpenAI’s technology as they would with any external vendor, with only a select few teams having deeper access.

This is yet another hint that Microsoft does have access the internal code of OpenAI's models, and if worst comes to worst - it is without a doubt that Microsoft could find a legal means to retain that code should OpenAI be unable to rectify its current predicament.

This is still a developing story... see you in the next one.

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