OpenAI’s future hangs in the balance amid a stalemate between staff and the board

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OpenAI’s future remained uncertain on Tuesday after extraordinary efforts by employees and investors to oust the board, which failed to get its directors to resign and reinstate co-founder Sam Altman.

By the end of Monday, 747 of OpenAI’s 770 employees had signed letters threatening to leave and join Microsoft if the board refused to fire Altman, people with direct knowledge said.

Venture capitalists backing the artificial intelligence startup are also exploring legal action to overturn the board, according to multiple people familiar with their thinking.

A person at a venture fund that has a stake in OpenAI said “legal action will be taken as soon as tomorrow,” without specifying what form it would take.

But according to a person with direct knowledge of the negotiations, the board remained firm as of Monday night and was ready to test employees’ willingness to leave.

The employees said in their letter that the directors “undermined our mission and the company” by firing Altman and stripping his co-founder Greg Brockman of his position on the board. Brockman left the company.

Ilya Sutzkever, the last surviving co-founder of the group and OpenAI’s chief scientist, signed a letter from employees after apologizing on social media for his role in Altman’s firing. However, he did not say whether he would quit the group.

According to people familiar with the situation, Schutschaver came under increasing pressure from staff over the weekend to reverse his position on Altman’s ouster.

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Altman’s ouster has plunged Silicon Valley’s most prominent start-up into a historic crisis. OpenAI is at the forefront of the development of artificial intelligence, which is widely considered the most significant technological advance since the smartphone.

Uncertainty about OpenAI’s future has created an opportunity for rival AI companies, caught up in last year’s launch of its wildly popular ChatGPT chatbot.

On Monday, companies including Anthropic and Cohere saw increased interest from OpenAI customers, according to people with direct knowledge of the matter.

According to one investor in the start-up, competitors are “all over” OpenAI employees in an attempt to poach talented researchers.

In a social media post on Monday, Marc Benioff, chief executive of software giant Salesforce, asked OpenAI researchers to send their CVs and asked them to match their salaries.

Mustafa Sulaiman, founder of AI start-up Inflection, described the events at OpenAI as “very sad” but said his company wanted to increase its operations. “Run with us!” he said.

In their letter, the employees threatened to leave the company “immediately” if the board did not reverse Altman’s firing. Microsoft on Sunday committed to hiring Altman, Brockman and other OpenAI employees who choose to join them in a new AI research subsidiary.

In addition to Chatsaver, OpenAI’s directors include Adam D’Angelo, CEO of question-and-answer service Quora; tech entrepreneur Tasha McCauley; Helen Donner from the Center for Security and Emerging Technologies at Georgetown University.

On Sunday night, the board named Emmett Shear, co-founder of video streaming service Twitch, as interim chief executive. He replaces Chief Technology Officer Meera Murati, who was promoted on Friday. On Monday afternoon, early OpenAI investor Vinod Khosla called on Shear to quit.

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In on-air interviews Monday, Microsoft Chief Executive Satya Nadella would not say who the chief executive would be Tuesday morning, but pledged to continue to support Altman whether he returns to OpenAI or works at Microsoft.

The software company has been a huge supporter of OpenAI, providing hardware support and continued investments.

Nadella said the 38-year-old entrepreneur will be able to pursue his side projects while working at Microsoft. Altman has a nuclear fission initiative and a cryptocurrency project, and has sought to launch a device company and chip business, according to people with knowledge of the matter. “We will work through the governance aspects of it,” Nadella said.

Ibrahim Ajami, head of ventures at Mubadala Capital, part of the $284bn Abu Dhabi sovereign wealth fund Mubadala Investments, said the confusion over OpenAI underscored how “it’s very difficult for these companies to review today”. Mupadala has a partnership with Microsoft but has not invested in OpenAI.

“As long-term investors, we value companies on their customers, deep partnerships, talent and long-term defensive moat,” he said. “Where does OpenAI sit today?”

Additional reporting by Camilla Hodgson in San Francisco

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