AI drama over as OpenAI CEO Sam Altman is reinstated with help from Microsoft

Ousted co-founder and CEO Sam Altman has been reinstated at OpenAI, the latest twist in the headline-grabbing power struggle that jeopardized the future of the buzzy artificial intelligence company and captivated the tech world.

OpenAI announced an agreement to bring back Altman while three of the four board members who abruptly pushed him out are leaving.

An interim board has been tapped, led by former Salesforce co-CEO Bret Taylor, and includes former Treasury Secretary Larry Summers and Quora CEO Adam D'Angelo. The Verge reported that the board will pick a larger board that may include OpenAI's largest investor Microsoft and other investors.

"We are collaborating to figure out the details," OpenAI said in a post on X, formerly Twitter.

Altman said he returning to OpenAI with the support of Microsoft CEO Satya Nadella.

"I’m looking forward to returning to OpenAI, and building on our strong partnership" with Microsoft, OpenAI's largest investor, Altman said in a post on X.

Altman’s return came after tense negotiations that involved OpenAI investors including Microsoft. 

Nearly all of OpenAI employees – including Ilya Sutskever, the company’s chief scientist and a member of its board of directors that voted to oust Altman — threatened to quit if Altman was not reinstated. 

It is still unclear why Altman, one of the most prominent figures in AI, was abruptly fired Friday.

The OpenAI board of directors had said that the 38-year-old tech executive was not “consistently candid in his communications.” The board has not said what directors thought he was not being honest about.

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The popular maker of ChatGPT was overseen by a nonprofit board whose charter was to make sure the company develops AI safely and for humanity's benefit.

The rift is thought to have been provoked by clashes between the board's safety concerns and Altman's ambitions for expansion. The for-profit subsidiary is one of the hottest tech start-ups with a valuation of nearly $90 billion.

"OpenAI will be virtually the same then before this soap opera began," Wedbush Securities analyst Daniel Ives said in a research note. But, it will have "a much stronger governance now in place which is key," he said.

Altman’s return to OpenAI means he will not join Microsoft to lead its new AI lab.

Several key employees had also agreed to join the Microsoft subsidiary including OpenAI president Greg Brockman and researchers Jakub Pachocki, Szymon Sidor and Aleksander Madry.

Microsoft has invested $13 billion in OpenAI and has a substantial stake in the company.

"We are encouraged by the changes to the OpenAI board. We believe this is a first essential step on a path to more stable, well-informed, and effective governance," Nadella said.