According to people familiar with the matter, Microsoft is discussing a list of governance reforms it plans to require the OpenAI board of directors to make in order to improve the board itself and prevent Microsoft from being caught off guard again in the future of OpenAI's major strategic moves. Microsoft is OpenAI's largest investor. OpenAI fired CEO Sam Altman on Friday, and investors have been agitating for his return ever since.
Microsoft said it can bring Ultraman back to OpenAI as long as certain conditions are met. The software giant wants to address what it sees as governance issues that led OpenAI's board to fire Altman.
Changes Microsoft is considering could include requiring OpenAI to expand the size of its board of directors and increase the experience requirements for members, according to people familiar with Microsoft's thinking.
Microsoft's deal with the artificial intelligence company already requires OpenAI's board of directors to seek Microsoft's approval when making mergers and acquisitions, people familiar with the matter said. OpenAI's board did not get Microsoft's approval when it sought to merge with rival artificial intelligence startup Anthropic last weekend. Microsoft will seek to strengthen these protections and increase the number of scenarios in which it has veto or at least notification rights.
Microsoft has invested about $13 billion in OpenAI, and people familiar with the matter said the company is mainly waiting for a new board of directors to emerge to discuss the changes.
Altman, OpenAI board members and interim CEO Emmett Shear have begun talks to potentially reinstate the ousted founder, according to people familiar with the matter. Once Altman's return and the current board's fate is sealed, negotiating and implementing any changes Microsoft wants will likely be part of an evolving process.
Microsoft CEO Satya Nadella made clear on Monday that OpenAI needs a major overhaul of its governance, whether Altman returns or takes charge of a new AI research unit at Microsoft, as Microsoft and Altman announced on Sunday. Nadella said he was dissatisfied that the OpenAI board gave him only the briefest notice after firing Altman before announcing his dismissal.
"Accidents are not good, we just want to make sure things are done in a way that allows us to work well together," Nadella said in an interview. Making major changes without Microsoft's involvement is "not good, and we will certainly make sure that some of the necessary changes happen."
Microsoft is also considering whether it should try to put an executive on OpenAI's board, according to people familiar with its thinking. The company will have to weigh its desire to gain more control against the risk that being directly involved in the startup could lead to challenges from U.S. regulators, people familiar with the matter said.