Microsoft will have observer role on OpenAI’s new board

Microsoft will have a role on OpenAI’s new board as the artificial intelligence start-up aims to strengthen its corporate governance following a week of chaos in which five out of six of its directors, including chief executive Sam Altman, were ousted or quit.

The new board will include Microsoft as a non-voting observer, alongside “individuals whose collective experience represents the breadth of OpenAI’s mission – from technology to safety to policy,” the start-up said on Wednesday.

Microsoft is OpenAI’s key partner, having committed more than $10 billion (€9.2 billion) in return for a significant minority stake. It has not had a role on the company’s board until now.

OpenAI is reconstituting its board after a period of tumult that has raised questions about its valuation and unusual corporate structure, in which a not-for-profit board controls the for-profit company.

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Feted as Silicon Valley’s most exciting start-up, OpenAI had been preparing for an employee stock sale expected to value it at $86 billion.

But the company was plunged into crisis when Altman and fellow co-founder Greg Brockman were ousted from the board on November 17. A revolt by employees and investors pressured the four remaining board members to reverse course, and the co-founders’ return to the company was announced just four days later.

As part of the deal to return Altman and Brockman, three remaining directors left the board: technology entrepreneur Tasha McCauley, Helen Toner from the Center for Security and Emerging Technology and Ilya Sutskever, a third OpenAI co-founder and the company’s chief scientist.

That left just one director from the initial six-person board: Adam D’Angelo, the chief executive of question-and-answer service Quora.

D’Angelo remains as part of a three-person transitional board alongside former US Treasury secretary Larry Summers and former Salesforce chief executive Bret Taylor, its chair.

Altman and Brockman will return to their roles as chief executive and president of the company, respectively, but will not retake their positions on the board, one of the stipulations of the outgoing directors, alongside an independent investigation into the events surrounding Altman’s abrupt sacking, according to a person with knowledge of the negotiations.

Sutskever’s position remains unclear. “While Ilya will no longer serve on the board, we hope to continue our working relationship and are discussing how he can continue his work at OpenAI,” Altman said in a statement on Wednesday.

“I love and respect Ilya, I think he’s a guiding light of the field and a gem of a human being. I harbour zero ill will towards him,” he added.

OpenAI’s directors are still seeking to fill out the board, which had nine members at the start of this year.

“The board’s focus is stabilising the company, building out a qualified and diverse board, and enhancing governance procedures consistent with the importance and complexity of OpenAI’s mission,” Taylor said on Wednesday.

“When these transitional tasks have been completed, I intend to step away and leave the oversight of OpenAI in the good hands of board colleagues,” he added. – Copyright The Financial Times Limited 2023