In what could be termed as the defining moment of Satya Nadella’s leadership at Microsoft, the India-born Chief Executive Officer roped in Sam Altman, Founder of OpenAI, to lead the company’s new Artificial Intelligence research team. The development comes just a few days after Altman was dramatically ousted from the company he founded, sending shockwaves through the tech industry. 

Altman, who has placed himself at the forefront of AI developments with ChatGPT, is expected to catapult Microsoft’s AI capabilities ahead of rival tech players including Google. Manish Maheshwari, Co-Founder, and former Head of Twitter India, told businessline: “The appointment of Sam Altman could change the AI game where Microsoft emerges as the clear leader. Just like how Google dominated the mobility space with Android, Microsoft now has the opportunity to capitalise on AI.”

Experts gave credit to Nadella’s ability in dealing with a crisis situation for getting Altman on board not even two days after he was forced to quit OpenAI, a company in which Microsoft had recently invested. “ It’s a coup by Nadella. This puts Microsoft at the top of the AI game. It’s a win for Microsoft because they have not been great with in-house innovation pipeline. But some of the acquisitions including LinkedIn, GitHub and Mojang Studios have worked well for the tech major. In this context, having Altman to lead the AI developments can be a game changing for Microsoft’s capabilities to build its own AI engine,“  Lloyd Mathias, Angel Investor and Former Marketing Head, HP Asia, told businessline. 

“Satya acted like a startup — quick to pounce on an opportunity and executed it with agility. He had placed a bet on OpenAI with an overall investment of about $2-3 billion which will probably be lost but with key talent including Sam Altman and Greg Brockman joining Microsoft, Satya would position the company to  become the leader of AI developments,” Maheshwari added. 

Perhaps Nadella learnt his lesson after exiting the phone space by giving up on Nokia too early. That was a crisis he inherited and managed poorly.  Nadella recently admitted that Microsoft’s exit from the mobile phone business could have been handled better. This time he wants to make sure that Microsoft doesn’t get left behind in the race for AI supremacy. 

Challenges ahead

Sam plus Satya could also usher in a seismic shift in overall AI developments. Microsoft taking leadership in AI will give the developer ecosystem confidence to accelerate their work because until now there was no certainty on the way forward. OpenAI being a non-profit could not give that leadership. “The question among the developer community was — who do we follow? Now, Microsoft will set the global standards in AI,” Maheshwari said. 

But Microsoft could also face challenges. One of the issues it could face is managing the ambitions of a maverick founder. Although Microsoft has a better track record of acquiring companies and growing them big, many founders of great start-up companies have had a tough time working in large legacy tech companies in the past. The other big hurdle could be in the form of regulators moving fast in putting in place guard rails for AI. “Microsoft still has a stake in OpenAI. This combined with Sam Altman leading the AI developments could push the regulators to take a look at the competitive landscape,“ Mathias said.

Former Nokia India and Pepsico India chief Shiv Shivkumar summed it up, “This is today’s AI era. One board loses trust in you and another board trusts you to make you an overnight offer. Time will tell.”