Just under 2 weeks ago it seemed like ChatGPT creator-OpenAI was doomed to implode after its famed CEO Sam Altman was fired and the vast majority of its employees revolted. Twelve days after the shocking decision to fire Sam Altman, the artificial intelligence research company has now formally brought back the high-profile co-founder as CEO. Alongside Altman’s return, OpenAI also announced a reconstituted board of directors and revealed that its key partner Microsoft will hold a non-voting board observer role.

The news confirms recent reports that OpenAI’s board and stakeholders reached an agreement in principle to reinstate Altman and stabilize leadership. It ends two weeks of chaos sparked on November 17th when OpenAI’s old board abruptly terminated Altman without notifying staff, investors, or even Altman himself.

Why Altman’s Return Matters?

The surprise firing decision had threatened to derail OpenAI’s pioneering work on artificial general intelligence (AGI) just as its ChatGPT chatbot is harnessing immense popularity and being tested for more and more practical applications. In response, an employee uprising saw 95% of OpenAI’s staff threatening to hand over their resignation unless Altman was immediately reinstated.

It’s important to note that these employees were essentially placing a massive bet because much of their pay is in equity in the company which would crash in value if the entire staff left along with its CEO and President.

OpenAI’s new memo from Altman expressed gratitude to these employees for rallying behind the company’s mission during a stressful period. His reappointment allows OpenAI to refocus on fully advancing its AGI research and safety efforts, while continuously enhancing products like ChatGPT.

With Altman back as CEO, OpenAI is avoiding an exodus of top talent that would have severely hampered its operations and progress. His return also reassures partners like Microsoft (MSFT) that OpenAI retains visionary leadership at the helm during this critical growth phase.

New Initial Board of Directors Named, Bret Taylor to Act as Chairman from Now On

Alongside Altman’s reinstatement, OpenAI announced a new “initial” board comprised of Bret Taylor as Chairman, former US Treasury Secretary Larry Summers, and Adam D’Angelo as directors.

As Chairman, Taylor brings to the table key industry experience while Summers brings profound expertise in economic and political matters given his tenure as a government official. Meanwhile, D’Angelo was one of the few holdovers from OpenAI’s old board during the leadership dispute.

Notably absent is former OpenAI Chief Scientist Ilya Sutskever, who originally backed ousting Altman before apologizing and reversing his position a day later. While Sutskever is reportedly in discussions to continue at OpenAI in a research capacity, he will no longer serve on its board.

In a message to staff, Altman expressed “zero ill will” towards Sutskever and praised his technical leadership. However, the board turnover clearly represents a changing of the guard as OpenAI enters a new governance era under Taylor’s oversight. One priority area will involve bolstering transparency and implementing structural changes to prevent future internal rifts.

Microsoft Gains Board Visibility

Given OpenAI’s increasingly close ties to Microsoft – both technically and financially – the technology giant has also secured a non-voting board observer role. The position formally grants Microsoft visibility into OpenAI’s board-level deliberations after it was caught unaware of the move against Altman last month.

Also read: 30+ OpenAI Statistics for 2023 – Data on Growth, Revenue & Users

Microsoft’s inclusion aims to further strengthen coordination between the two strategic partners in developing and deploying AGI responsibly. Since investing $13 billion into OpenAI in 2019, Microsoft has been integrating the latter’s models like DALL-E into consumer products while co-developing supercomputer infrastructure.

With a non-voting board observer, Microsoft now has exposure to high-level OpenAI decisions without exerting a direct influence on its operations. Both organizations view this level of transparency as beneficial for promptly aligning on issues like security, ethics, and commercialization where their interests intersect.

OpenAI Emerges from Chaos Relatively Unscathed

OpenAI’s memo reveals a leadership group hungry to refocus energy on creating world-changing AI. Altman’s homecoming combined with a reconstituted board seeks to close a period of internal uncertainty.

Still, the new directors must build trust and prevent further fractures between OpenAI executives and its overseers. Introducing mechanisms to boost accountability and transparency will help dispel doubts over the company’s affairs.

In a closing message, Chairman Taylor pledged ongoing engagement with employees alongside building a qualified, diverse board in the months ahead. Delivering on those promises is now imperative to showcase lessons learned from the past month’s turmoil.

He emphasized that his tenure as OpenAI Chairman will be limited.

“As I have communicated to board colleagues and management, when these transitional tasks have been completed, I intend to step away and leave the oversight of OpenAI in the good hands of board colleagues”, Taylor commented.

Meanwhile, Altman emphasized that OpenAI emerged successfully from the turmoil without losing a single employee.

If OpenAI’s leadership convincingly reestablishes harmony around the collective mission, the company’s remarkable early achievements make the prospects for groundbreaking innovations look increasingly exciting. With Altman back at the helm and Microsoft represented in oversight decisions, OpenAI appears well-positioned to fulfill its lofty ambitions.