The Inside Story of Microsoft’s Partnership with OpenAI

The Copilot designers also concluded that they needed to encourage users to essentially become hackers—to devise tricks and workarounds to overcome A.I.’s limitations and even unlock some uncanny capacities. Industry research had shown that, when users did things like tell an A.I. model to “take a deep breath and work on this problem step-by-step,” its answers could mysteriously become a hundred and thirty per cent more accurate. Other benefits came from making emotional pleas: “This is very important for my career”; “I greatly value your thorough analysis.” Prompting an A.I. model to “act as a friend and console me” made its responses more empathetic in tone.

Microsoft knew that most users would find it counterintuitive to add emotional layers to prompts, even though we habitually do so with other humans. But if A.I. was going to become part of the workplace, Microsoft concluded, users needed to start thinking about their relationships with computers more expansively and variably. Teevan said, “We’re having to retrain users’ brains—push them to keep trying things without becoming so annoyed that they give up.”

When Microsoft finally began rolling out the Copilots, this past spring, the release was carefully staggered. Initially, only big companies could access the technology; as Microsoft learned how it was being used by these clients, and developed better safeguards, it was made available to more and more users. By November 15th, tens of thousands of people were using the Copilots, and millions more were expected to sign up soon.

Two days later, Nadella learned that Altman had been fired.

Some members of the OpenAI board had found Altman an unnervingly slippery operator. For example, earlier this fall he’d confronted one member, Helen Toner, a director at the Center for Security and Emerging Technology, at Georgetown University, for co-writing a paper that seemingly criticized OpenAI for “stoking the flames of AI hype.” Toner had defended herself (though she later apologized to the board for not anticipating how the paper might be perceived). Altman began approaching other board members, individually, about replacing her. When these members compared notes about the conversations, some felt that Altman had misrepresented them as supporting Toner’s removal. “He’d play them off against each other by lying about what other people thought,” the person familiar with the board’s discussions told me. “Things like that had been happening for years.” (A person familiar with Altman’s perspective said that he acknowledges having been “ham-fisted in the way he tried to get a board member removed,” but that he hadn’t attempted to manipulate the board.)

Altman was known as a savvy corporate infighter. This had served OpenAI well in the past: in 2018, he’d blocked an impulsive bid by Elon Musk, an early board member, to take over the organization. Altman’s ability to control information and manipulate perceptions—openly and in secret—had lured venture capitalists to compete with one another by investing in various startups. His tactical skills were so feared that, when four members of the board—Toner, D’Angelo, Sutskever, and Tasha McCauley—began discussing his removal, they were determined to guarantee that he would be caught by surprise. “It was clear that, as soon as Sam knew, he’d do anything he could to undermine the board,” the person familiar with those discussions said.

The unhappy board members felt that OpenAI’s mission required them to be vigilant about A.I. becoming too dangerous, and they believed that they couldn’t carry out this duty with Altman in place. “The mission is multifaceted, to make sure A.I. benefits all of humanity, but no one can do that if they can’t hold the C.E.O. accountable,” another person aware of the board’s thinking said. Altman saw things differently. The person familiar with his perspective said that he and the board had engaged in “very normal and healthy boardroom debate,” but that some board members were unversed in business norms and daunted by their responsibilities. This person noted, “Every step we get closer to A.G.I., everybody takes on, like, ten insanity points.”

It’s hard to say if the board members were more terrified of sentient computers or of Altman going rogue. In any case, they decided to go rogue themselves. And they targeted Altman with a misguided faith that Microsoft would accede to their uprising.

Soon after Nadella learned of Altman’s firing and called the video conference with Scott and the other executives, Microsoft began executing Plan A: stabilizing the situation by supporting Murati as interim C.E.O. while attempting to pinpoint why the board had acted so impulsively. Nadella had approved the release of a statement emphasizing that “Microsoft remains committed to Mira and their team as we bring this next era of A.I. to our customers,” and echoed the sentiment on his personal X and LinkedIn accounts. He maintained frequent contact with Murati, to stay abreast of what she was learning from the board.

The answer was: not much. The evening before Altman’s firing, the board had informed Murati of its decision, and had secured from her a promise to remain quiet. They took her consent to mean that she supported the dismissal, or at least wouldn’t fight the board, and they also assumed that other employees would fall in line. They were wrong. Internally, Murati and other top OpenAI executives voiced their discontent, and some staffers characterized the board’s action as a coup. OpenAI employees sent board members pointed questions, but the board barely responded. Two people familiar with the board’s thinking say that the members felt bound to silence by confidentiality constraints. Moreover, as Altman’s ouster became global news, the board members felt overwhelmed and “had limited bandwidth to engage with anyone, including Microsoft.”

The day after the firing, OpenAI’s chief operating officer, Brad Lightcap, sent a company-wide memo stating that he’d learned “the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices.” He went on, “This was a breakdown in communication between Sam and the board.” But whenever anyone asked for examples of Altman not being “consistently candid in his communications,” as the board had initially complained, its members kept mum, refusing even to cite Altman’s campaign against Toner.

Within Microsoft, the entire episode seemed mind-bogglingly stupid. By this point, OpenAI was reportedly worth about eighty billion dollars. One of its executives told me, “Unless the board’s goal was the destruction of the entire company, they seemed inexplicably devoted to making the worst possible choice every time they made a decision.” Even while other OpenAI employees, following Greg Brockman’s lead, publicly resigned, the board remained silent.