After Sam Altman was fired from OpenAI late last month, the startup’s employees threatened to leave and accept a blanket offer from Microsoft to hire them all.
This was an audacious bluff and most staffers had no real interest in working for Microsoft, several current and former employees told Business Insider.
After the sudden ouster of their CEO, hundreds of OpenAI employees signed an open letter demanding Altman’s reinstatement and the resignation of the board. At the time, their main source of leverage was a plan to all quit and join Altman and President Greg Brockman at a new AI group within Microsoft.
The employees didn’t have to go through with this in the end. Altman and Brockman and most of the C-suite are back at OpenAI. New board members are in place, with additions coming.
Now, the truth behind that core Microsoft threat is coming out. Some Microsoft insiders told BI that hiring everyone from OpenAI was seen internally as a last resort. And for at least some of those OpenAI employees, there’s relief that they don’t actually have to go work for Microsoft.
“It was sort of a bluff that ultimately worked,” explained one former employee who’s still in touch with current staffers. This person, and others who spoke with BI, asked not to be identified discussing sensitive matters.
One current OpenAI employee admitted that, despite nearly everyone on staff signing up to follow Altman out the door, “No one wanted to go to Microsoft.” This person called the company “the biggest and slowest” of all the major tech companies — the exact opposite of how OpenAI employees see their startup.
Pressure to sign
Given the absence of interest in joining Microsoft, many OpenAI employees “felt pressured” to sign the open letter, the employee admitted. The letter itself was drafted by a group of longtime staffers who have the most clout and money at stake with years of industry standing and equity built up, as well as higher pay. They began calling other staffers late on Sunday night, urging them to sign, the employee explained.
“We all left these big corporations to move fast and build exciting things,” the employee said. “The bureaucracy of something as big as Microsoft is soul crushing.”
While OpenAI staffers would have followed through with their threat and joined Microsoft, they probably would have left at the first opportunity for other AI startups such as Anthropic, Hugging Face, and Cohere, the employee added.
Looking down on legacy tech
Another former OpenAI employee agreed, saying people working at the San Francisco-based startup “look down on what they consider legacy companies” and “see themselves as innovators who are radically changing the world.”
OpenAI products like ChatGPT and DALL-E kicked off the current AI craze in tech and investing. The startup’s avowed goal is artificial general intelligence, or AGI, which it defines as technology that can “outperform humans at most economically valuable work.” It’s a lofty goal well outside the norm for Microsoft, and some people at OpenAI think the enterprise software giant would not have been capable of continuing the mission.
“Even though we have a partnership with Microsoft, internally, we have no respect for their talent bar,” the current OpenAI employee told BI. “It rubbed people the wrong way to entertain being managed by them.”
OpenAI declined to comment, while Microsoft did not respond to a request for comment.
Money, the great motivator
Beyond the culture clash between the two companies, there was another important factor at play for OpenAI employees: money. Lots of it was set to disappear before their eyes if OpenAI were to suddenly collapse under a mass exodus of staff.
“Sam Altman is not the best CEO, but millions and millions of dollars and equity are at stake,” the current OpenAI employee said.
Not only are OpenAI employees paid very well in cash, with base salaries typically starting at $300,000, a typical equity package is worth $2 million over four years, and much more for some workers.
A laughable idea
Microsoft agreed to hire all OpenAI employees at their same level of compensation, but this was only a verbal agreement in the heat of the moment.
Another OpenAI employee openly laughed at the idea that Microsoft would have paid departing staffers for the equity they would have lost by following Altman.
A scheduled tender offer, which was about to let employees sell their existing vested equity to outside investors, would have been canceled. All that equity would have been worth “nothing,” this employee said.
The former OpenAI employee estimated that, of the hundreds of people who signed the letter saying they would leave, “probably 70% of the folks on that list were like, ‘Hey, can we, you know, have this tender go through?'”
Thanks to the success of their big bluff, Altman is back and the tender offer is going on as planned, valuing OpenAI at more than $80 billion. It was even extended through January 5, according to CNBC, giving employees more time to become millionaires — if they aren’t already.
Furious Microsoft employees
Some Microsoft employees, meanwhile, were furious that the company promised to match salaries for hundreds of OpenAI employees. The offer came after Microsoft had laid off more than 10,000 employees, frozen salaries, and cut bonuses and stock awards this year.
“How many loyal employees who stayed at Microsoft while working 12+ hours daily and living in constant fear of being laid off all year?” one Microsoft employee told BI. “Now here comes OpenAI.”
Are you an OpenAI, or Microsoft employee, or someone with a tip or insight to share?
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