Microsoft has hired former OpenAI CEO Sam Altman and co-founder Greg Brockman. This development comes after Altman was dismissed from OpenAI, with the board expressing a lack of confidence in his ability to continue leading the organization. Despite efforts to negotiate Altman’s return to OpenAI, Microsoft CEO Satya Nadella announced that both Altman and Brockman would be joining Microsoft to lead a new advanced AI research team.

Microsoft’s decision not to participate in OpenAI’s board, despite being a major investor, meant they were not involved in Altman’s dismissal. In response to the board’s decision, Microsoft pushed for Altman’s reinstatement. When this did not materialize, Nadella decided to offer Altman a new role within Microsoft.

Altman will assume the CEO title of this new group at Microsoft. Nadella expressed excitement about the addition of Altman and Brockman, emphasizing the intention to provide them with the necessary resources for success. This move is part of Microsoft’s broader strategy to strengthen its position in the AI sector.

The new advanced AI research team at Microsoft will also include key talents from OpenAI. Jakub Pachocki, OpenAI’s director of research, and other prominent figures like Szymon Sidor and Aleksander Madry will hold leadership positions in Microsoft’s team.

This hiring comes shortly after Microsoft announced the development of its custom AI chip, designed to train large language models and potentially reduce reliance on Nvidia. Microsoft’s investment in custom silicon chips, including an Arm-based CPU for cloud workloads, is a clear indication of its commitment to enhancing its AI capabilities.

Microsoft’s relationship with OpenAI has been close and collaborative, being the exclusive cloud partner and also their multimillion-dollar investment in January 2023, which solidified Microsoft as a major investor. This partnership has already borne fruit in various AI-based features in Windows, Office, and the Bing Chat, now known as Copilot. Despite the changes in leadership at OpenAI, with Emmett Shear, co-founder of Twitch, stepping in as interim CEO, this relationship is expected to continue, as indicated by Nadella.

However, with Microsoft creating a new advanced AI development group led by Altman, the dynamics between the tech giant and the AI startup might evolve. This move could potentially lead to a reduction in direct collaboration.