OpenAI’s Sam Altman Is Ready for His Second Act at Microsoft

While Microsoft’s swift hiring of Sam Altman could boost its position as the frontrunner in the race of AI, there are unintended consequences that will benefit Google’s position in AI dominance, industry analysts tell Adweek.

Altman’s move to Microsoft capped a whipsaw weekend that began Friday with the co-founder and CEO of OpenAI being ousted by the board, attempts to retain him and finally the move to the world’s No. 2 most valuable company, which already had invested $13 billion in OpenAI.

The dizzying unfolding of events has left executives in the ad industry pondering the implications for the market dominance of search engines.

A potential shift by Microsoft from a GPT-powered model to an internal technology might hinder the tech giant’s standing in the AI race. This move could prove advantageous to rival Google, potentially granting it a speed-to-market edge due to its in-house tech development.

“If Altman was ousted because he is moving too quickly to ship products, and that worried some of the AI ethicists at OpenAI, that means ChatGPT could go slower or fall apart,” said Erik Hamilton, vp of search and social at Good Apple.

Microsoft CEO Aatya Nadella hired Altman to lead a newly established advanced AI research team.

“He’s basically working for the same team, just on the side of the commercial stakeholder,” said Nicole Greene, vp analyst at Gartner. “It’s a shift in focus.”

Microsoft had a strong quarter ending in September, suggesting the company’s investments in gen AI were starting to positively impact revenue. In addition to integrating gen AI features across its devices, Microsoft expanded AI-powered advertising in its search business on Bing.

Still, advertisers are yet to see a material lift on query volume in Bing after Microsoft launched the generative experience, according to Aaron Levy, vp of paid search at Tinuiti.

“I see this as a long-term advantage for Microsoft as they’ll now be able to develop on their terms, without the oversight from a non-profit board,” he said. “Azure will provide an arguably unlimited supply of computing power, and they’ll be able to develop the search experience in tandem with the model itself.”

Elsewhere, industry insiders have indicated the recent changes at OpenAI might result in short-term product quality issues for ChatGPT, increased downtime and delays in new signups. These developments are raising concerns about OpenAI’s long-term sustainability.

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