OpenAI May Not Offer Board Seat to Microsoft and Other Investors

OpenAI is unlikely to extend seats to Microsoft and other investors, including Khosla Ventures and Thrive Capital, on its new board.

OpenAI Board experienced several tumultuous events last week, along with the sudden removal of its CEO and co-founder, Sam Altman, without stating any specific reason. This step alarmed both investors and employees. Subsequently, Altman was reinstated, followed by the commitment to form a new board.

Altman’s departure led to uncertainty about the startup’s future at the forefront of the artificial intelligence boom.

Microsoft’s Unconventional Alliance with OpenAI

Microsoft has invested over $10 billion in OpenAI and holds a 49% stake. The tech giant is one of the biggest backers of OpenAI, which operates ChatGPT, its widely acclaimed generative AI chatbot.

Thomas Hayes, CEO of hedge fund Great Hill Capital, while speaking to Reuters, expressed, “I do not know that it’s going to be the choice of OpenAI to leave Microsoft off the board.”

Hayes emphasized, “Microsoft will have something to say about it, given the amount of money they have put behind them.” He added that it wouldn’t be in Microsoft’s interest “to sit passively.”

OpenAI Board Update

The Information was the first to break the news, stating that OpenAI will have a nine-member board. According to the report, the three initial directors of the OpenAI new board—Chair Bret Taylor, former Treasury Secretary Larry Summers, and Quora CEO Adam D’Angelo—are anticipated to receive confirmation as early as this week.

The AI startup’s decision not to grant a board seat to its investors implies that OpenAI wants to prioritize security practices over maximizing investor returns.

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