OpenAI doesn't plan to offer Microsoft or other outside investors a board seat: reports
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- OpenAI doesn't plan to give board seats to investors like Microsoft, per Reuters and The Information.
- Microsoft is OpenAI's biggest backer, having invested over $10 billion in the company.
- Microsoft CEO Satya Nadella previously hinted at the possibility of gaining a board seat.
Some of OpenAI's biggest backers are unlikely to gain board seats even after the company's management shakeup, Reuters and The Information reported on Tuesday.
OpenAI's new board is not planning to offer board seats to outside investors, such as Microsoft, Thrive Capital, and Khosla Ventures, Reuters reported, citing a source familiar with the matter. The move signifies the new board prioritizing AI safety over the pursuit of investor profits, per the Information.
Microsoft is OpenAI's largest backer, having invested over $10 billion in the company. Khosla Ventures was an early investor back in 2019, while Thrive Capital is leading the deal to buy OpenAI employee shares which valued the company at over $80 billion.
Given Microsoft's level of investment, it would not be in the company's interest to "sit passively," Thomas Hayes, chairman of hedge fund Great Hill Capital told Reuters on Tuesday.
OpenAI cofounder and CEO Sam Altman was fired by his company's board on November 17, before staging a dramatic comeback five days later. OpenAI announced Altman's return and the exit of two board members involved in his initial ousting on November 22.
The company's new board will initially consist of former treasury secretary Larry Summers, former Salesforce co-CEO Bret Taylor, and Quora founder Adam D'Angelo. This new board is expected to consider candidates to fill an expanded nine person board, according to the Verge.
OpenAI has an unusual governance structure, where its for-profit arm is governed by a non-profit board. This non-profit board is meant to keep the company focused on achieving its mission of building AI for the benefit of humanity.
Microsoft CEO Satya Nadella previously said he wanted changes to OpenAI's governance structure, following the board's ousting of Altman. He and other investors pushed for Altman to be reinstated.
Nadella also hinted at the possibility of his company having a board seat at OpenAI during an interview with tech journalist Kara Swisher on November 21. "We'll sort of cross that if it happens, but I think that we will need to make sure that our interests are solid," Nadella told Swisher.
OpenAI, Microsoft, Thrive Capital, and Khosla Ventures did not immediately respond to requests for comment from Business Insider, sent outside regular business hours.