OpenAI Still Trying To Lure Altman Back; Investors Could Sue

Despite OpenAI co-founder Sam Altman agreeing to join a new AI research venture at tech giant Microsoft, executives at the startup continue “intense discussions” to bring him back after almost its entire staff threatened to quit.

In an internal memo reported on by Bloomberg News, Anna Makanju, OpenAI vice president of global affairs, said company management was in touch with Altman, interim CEO Emmett Shear, and the company’s board “but they are not prepared to give us a final response this (Monday) evening.”

Earlier that day, nearly all of the company’s 770 employees signed a letter to the company’s board saying they will leave the generative AI startup unless the board resigns and brings back Altman and former President Greg Brockman.

While both Altman and Brockman had earlier agreed to join a new Microsoft venture, the software giant’s CEO, Satya Nadella, made it clear through multiple interviews that the door remained open for Altman to return to OpenAI.

A lot to juggle

Trying to get Altman to return apparently was not the only thing the OpenAI board has tried to do in recent days to salvage the company.

The board of directors approached rival Anthropic and Dario Amodei about a potential merger after Altman was dismissed, per The Information. The intent was to get Amodei to replace Altman as CEO, according to the report.

Figuring out a way forward with or without Altman may not be the board’s only concern.

Some OpenAI investors are reportedly exploring legal action against the company’s board, per a report by Reuters. Some have even reportedly met with legal advisers to study options.

While Microsoft has famously invested more than $10 billion in the generative AI startup, other investors have also filled OpenAI’s coffers with hundreds of millions of dollars.

Per Crunchbase data, the company has more than a dozen investors.

Y Combinator took part in a small seed round for the company, while Khosla Ventures and Reid Hoffman Foundation led a seed round.

Numerous big-name firms have taken to the secondary market to pick up shares in the company — including Andreessen Horowitz, Bedrock, Founders Fund, K2 Global, Sequoia Capital, SVA, Tiger Global Management, Thrive Capital and Wisdom Ventures.

Last month, a report in The Information said Thrive Capital will lead a deal to buy the OpenAI shares at a price that will value the artificial intelligence giant at at least $80 billion. That deal is not believed to have closed.

In other news

While OpenAI’s drama is dominating the news cycle, one of its international competitors made waves.

Israel-based AI21 Labs said it closed a $208 million Series C funding at a valuation of $1.4 billion — nearly three months after it announced it had raised $155 million of the same Series C from investors that included Google and Nvidia at the same valuation.

The additional $53 million included cash from Intel Capital and Comcast Ventures.

AI21 competes with the likes of both OpenAI and Anthropic. The startup has its own proprietary large language models, called Jurassic-2. Those models help power the company’s developer platform for building custom text-based business applications and its multilingual reading and writing AI assistant.

The company says it has now raised $336 million.