Why Microsoft hiring Sam Altman is not the best option for both the firms

livemint.com:

OpenAI, Microsoft Corp. said it would hire Sam Altman to lead a new artificial intelligence research team. It was a stunning turn for Microsoft, which had bet big on OpenAI and its former chief executive officer, Altman.

But it’s not an ideal outcome for Altman or Microsoft. Which is why a group of OpenAI investors is still pushing for Altman’s return as chief, a move Microsoft CEO Satya Nadella said he’s open to. Nearly all of OpenAI’s roughly 770 employees have signed a letter to OpenAI’s board threatening to quit unless its directors resign over their handling of Altman’s termination.

“Microsoft has assured us that there are positions for all OpenAI employees at this new subsidiary should we choose to join," the letter read. If that were to pass, it would effectively be an acquisition without a term sheet, which at first would seem like a coup for Nadella. While Microsoft shares rose to an all-time high following the news, Altman’s hiring would come with complications.

For one, onboarding droves of new employees will be insanely costly, particularly in a year that Microsoft froze salaries for full-time workers. On top of that, Microsoft still has a commitment of more than $13 billion to OpenAI. It’s not in Microsoft’s interest to blow up the startup.

Any employees who do join Microsoft can’t simply replicate the work they were doing on OpenAI properties like GPT-5 without inviting a nightmare of claims over trade-secret theft. That’s partly why there’s been such a strong push to reinstate Altman at OpenAI, rather than have him try to conjure something as significant from scratch. Nadella has suggested Microsoft would make the best of a bad situation.