"The Biggest Loser in OpenAI Sam Altman Dismissal Crisis is MS... AI Leadership at Risk"

Nadella Decided to Invest in 2019 After Persuading Altman
MS Collaborates with OpenAI to Set Generative AI Strategy
"Possible Demand for Board Position if Altman Returns"

With the sudden dismissal of Sam Altman, the former CEO of OpenAI known as the 'father of ChatGPT,' analysts suggest that the biggest potential loser could be Microsoft (MS). Having invested nearly 16 trillion won of Korean funds into OpenAI and built core generative artificial intelligence (AI) businesses together, there are concerns that MS might lose market leadership.

Satya Nadella, CEO of Microsoft (MS)
Photo by Getty Images Yonhap News

On the 19th (local time), U.S. economic media Business Insider cited Dan Ives, a veteran Wall Street tech stock analyst from Wedbush, saying, "If Altman does not return to OpenAI, MS will be the biggest loser," and "Conversely, if he returns, MS will be in a better position." Given that Satya Nadella, CEO of Microsoft, and former CEO Altman are close to a 'shared destiny' in the AI field, the analysis is that MS will suffer significant damage.

Altman is the person who, in 2019 when OpenAI was in its fourth year, visited MS headquarters in Seattle multiple times to showcase OpenAI products to CEO Nadella and secured the first investment. After his dismissal, co-founder and board chairman Greg Brockman and three senior researchers resigned, and other OpenAI employees are reportedly considering leaving. Through this process, CEO Nadella appears to judge that the core of OpenAI is former CEO Altman.

The reason Nadella and MS must focus intensely on OpenAI's CEO issue is that MS's generative AI strategy has been largely aligned with OpenAI. MS has been competing with Google this year for leadership in generative AI. Against Google, which dominates over 90% of the search market, MS's strategy was to leverage OpenAI's ChatGPT. As an early investor in OpenAI, MS has actively utilized this technology and accelerated technology development until recently to dominate the generative AI market.

In particular, on the 15th, MS revealed about 100 technologies and updates forecasting AI innovation and change at the 'Ignite Conference,' where OpenAI played a key role. On the day of the event, MS introduced AI chips such as the 'Maya 100,' a graphics processing unit (GPU) developed in-house as a core AI infrastructure, explaining that it collaborated with OpenAI in this process. Former CEO Altman stated at the time, "We refined and tested the Maya chip with our (AI) models in cooperation with MS."

Given this situation, MS has reportedly scaled down its internal AI projects while expanding cooperation with OpenAI. Before ChatGPT's huge success, MS was working on an industrial metaverse project but laid off most of the staff responsible for it this year. Business Insider reported, "If OpenAI collapses, MS has no urgent backup plan to respond." Analyst Ives analyzed that Nadella understands Altman's influence at OpenAI and is deeply concerned that Google or Amazon could benefit from this situation.

However, Ives predicts that if former CEO Altman returns to OpenAI, the influence of Nadella and MS will become even stronger. It is reported that Altman demanded the replacement of the board and management as a condition for his return. Therefore, if he succeeds in returning, MS is expected to demand a board position that allows it to exercise direct influence through this incident. Ives said, "There is growing consensus in Silicon Valley and Wall Street that Altman will soon return and MS will be in a stronger position to control OpenAI's strategic direction."

CEO Nadella is reportedly leading pressure to reinstate Altman as OpenAI CEO. It is said that Nadella was greatly angered by the news just before the OpenAI board announced Altman's dismissal. Nadella personally contacted Altman and promised to support him throughout the subsequent process. Investors, including MS, are also reportedly willing to invest in a new company if Altman does not return to OpenAI and establishes one.