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OpenAI’s Shakeup Has Companies Seeking Alternatives

OpenAI

Last week’s leadership changes at OpenAI reportedly left many customers seeking alternatives.

As CNBC reported Tuesday (Nov. 21), a number of startups say they or their customers are considering relying less on OpenAI’s large language models (LLMs) since the artificial intelligence (AI) firm’s firing of Sam Altman, company co-founder and CEO.

And while that firing was short-lived, with Altman apparently now being reinstated, some of the people quoted in the interview cite the upheaval itself, and not Altman’s departure, as the reason for the uneasiness.

Among them is Arjun Bansal, whose Log10 produces tools that developers can use to create LLM-powered applications, and who began receiving increased calls from customers who wanted to cut back on their use of OpenAI’s products.

“People have been reaching out on how they would go through that process of being able to fine-tune different models or try out different providers with minimal disruption to how their code is set up,” Bansal told CNBC.

“It is a very unprecedented situation, that a company of this size with this very unusual governance structure has gone through so much change in just over a weekend.”

Martin Kon, president and chief operating officer of Cohere, which also provides LLMs for use in applications, said he’s had an uptick in inquiries since OpenAI’s shakeup began.

“Enterprises value certainty, as the significant increase of inbound inquiries we’ve seen this week demonstrates we are still early in enterprise AI adoption, and companies are taking a hard look at how much they value cloud flexibility and independence from big tech,” Kon said.

Altman was removed from his post on Nov. 17 after the board carried out a review that found he had not been “consistently candid in his communications with the board.”

Supporters of Altman — among them Microsoft CEO Satya Nadella, whose company is OpenAI’s largest investor — spent the weekend fighting for his reinstatement. But after reaching an impasse, ultimately Altman joined Microsoft as head of its new AI research team.

However, the company had said earlier this week it was working to bring him back, as a majority of its employees threatened to quit if he wasn’t reinstated.

On Wednesday (Nov. 22), OpenAI announced on Twitter/X that it had reached an agreement in principle for Altman to return as CEO, with new board members in place.