Microsoft 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. This move also triggered a revolt by OpenAI’s staffers, who threatened to quit the startup and join their former boss at Microsoft’s new division unless the board resigned.


Apart from Chief Technology Officer Mira Murati, Chief Data Scientist Ilya Sutskever and Chief Operating Officer Brad Lightcap, about 500 members of 770 OpenAI staff in a letter said they would resign, a person familiar with the matter told Reuters. The signatories stated that are “unable to work for or with people that lack competence, judgment and care for our mission and employees”.


OpenAI did not immediately respond to a request for comment.


Earlier in the day, OpenAI’s board hired former Twitch chief Emmett Shear as interim chief executive officer, defying calls from investors to reinstate Altman. He succeded Mira Murati, who had publicly aligned herself with Altman. This marked the third change in the leadership within three days.


Microsoft, on the other hand, hit a new all-time high after the software giant hired Altman and another OpenAI co-founder Greg Brockman to lead its new in-house advanced artificial intelligence research team. Its shares had edged lower on Friday after Altman’s shock exit from the creator of ChatGPT, but they recovered on Monday, rising 1.9 per cent, as analysts noted that they don’t see the firing affecting the OpenAI-Microsoft relationship and said they were positive about Altman’s new role at the Windows software maker.


This is a “clear win” for Microsoft and “should help offset concerns regarding potential near-term uncertainty at OpenAI,” Evercore ISI analyst Kirk Materne wrote in a note.


In a post on Linkedin, Nadella wrote that Microsoft remains committed to its partnership with OpenAI and has “confidence in our product roadmap.” 

But by tapping Altman, Nadella acquired a driver for the new brand of AI captivating executives and politicians everywhere. At OpenAI, the co-founder was credited with kicking off a race for artificial intelligence supremacy from Washington to Beijing, inviting comparisons to Bill Gates and Steve Jobs.


Microsoft has invested billions of dollars in OpenAI and staked its future on the startup, releasing what it called AI copilots to business customers based on OpenAI’s technology.


On Monday, Brockman posted online that he and Altman had already recruited three OpenAI scientists to work with them at Microsoft. “The mission continues,” he wrote on X, the platform formerly known as Twitter.


On the other hand, in a statement on X, Shear dismissed speculation that OpenAI’s board ousted Altman because of a spat over the safety of powerful AI models. He vowed to open an investigation into the firing, consider new governance for OpenAI and continue its path of making available technology like its viral chatbot. “I’m not crazy enough to take this job without board support for commercialising our awesome models,” Shear said, adding: “OpenAI’s stability and success are too important to allow turmoil to disrupt them like this.”


The decision not to reinstate Altman as OpenAI’s chief confounded efforts by investors and employees to steady the startup’s path.


They feared his abrupt sacking could lead to a mass exodus of talent and impact an upcoming $86 billion share sale.


Shortly after the internal announcement of Shear’s appointment, distraught employees “streamed out” of OpenAI headquarters in San Francisco, The Information reported