Microsoft will struggle to clean up ugly AI mess

Microsoft boss Satya Nadella’s stressful weekend is probably only the beginning. The board overseeing artificial intelligence venture OpenAI abruptly ousted Chief Executive Sam Altman on Friday. After an unsuccessful attempt to broker his return, the software giant hired him and others to lead a new in-house team. It may solve one problem, but there are many more to tackle.

A lack of corporate governance protections left Nadella with few options to salvage his company’s $13 billion investment in OpenAI. The fast-growing outfit, amid raising funds at a nearly $90 billion valuation, is overseen by a nonprofit board designed to ensure that safety is given priority alongside growth.

Tensions between Altman and his more risk-averse colleagues over how to limit AI’s potential societal harms came to a head before his firing, technology publication The Information reported. The quirky structure, although not unique, already looked somewhat at odds with the overriding mission of its $2.7 trillion backer.

As a 49% owner of OpenAI, Microsoft could have hedged itself by getting more directly involved in oversight. After LinkedIn founder Reid Hoffman stepped down from OpenAI’s board in March, three other directors left, too. Their seats sat vacant until this weekend’s implosion. Just one additional vote from Microsoft, which has no boardroom representative, might have prevented the unraveling.

Recruiting Altman is at least a better outcome for Microsoft than standing by and watching him go to Google, a rival startup or opening his own AI shop. At the same time, it splinters the operation. OpenAI can maybe map out safe progress, while Altman aims to fully commercialize the technology, but Google’s AI efforts were similarly split until it decided in April to fold its DeepMind and Brain units together to accelerate progress.

There also will be the challenge of retaining Altman and keeping him focused. He left his previous job for OpenAI, but is also interested in developing nuclear power, consumer hardware and microchips. Elon Musk’s divided attention at his space, social media, neurotechnology and other ventures consistently raises concerns for Tesla shareholders.

Microsoft’s exhaustive resources are powerful and Altman is also clearly able to inspire, evidenced by more than 500 OpenAI employees threatening to join him. Money and salesmanship are two essential elements of developing AI, but so are the proper controls, risk management and strategic clarity. Reuters