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Sam Altman returns as OpenAI CEO less than a week after he was fired by board

Sam Altman will return as CEO of OpenAI, the startup tweeted early Wednesday morning. The move follows immense pressure from employees and investors on the board that ousted him less than a week ago.

Former Salesforce co-CEO Bret Taylor and former Treasury Secretary Larry Summers will join OpenAI’s board, the Microsoft-backed startup said, with Taylor holding the chair position. Adam D’Angelo, co-founder and CEO of question-and-answer startup Quora, will remain on the board.

Concurrent with Altman’s return, Helen Toner, Tasha McCauley and co-founder Ilya Sutskever were removed as board members. All had been involved in pushing out Altman, although Sutskever later walked back his support for the coup and remains an OpenAI employee as of Wednesday.

“We are collaborating to figure out the details. Thank you so much for your patience through this,” OpenAI said in the message on X, formerly known as Twitter, posted Wednesday at 1 a.m. ET.

On Monday, hundreds of employees, including Sutskever, signed a letter saying that if the board didn’t resign and bring Altman back, the overwhelming majority of employees would move to work with him at Microsoft.

Satya Nadella, Microsoft’s CEO, said in an X post Monday that Altman and his co-founder Greg Brockman would join Microsoft to form a new AI lab. Preparations for that lab were already underway when the announcement from OpenAI came early Wednesday.

That followed an announcement late Sunday that OpenAI had hired ex-Twitch CEO Emmett Shear as Altman’s interim replacement. Originally, the board had said OpenAI technology chief Mira Murati would assume that role, but she soon joined the parade of employees calling for Altman’s return.

“[W]ith the new board and w satya’s support, i’m looking forward to returning to openai, and building on our strong partnership with msft,” Altman wrote in a post of his own on X.

Nadella applauded changes OpenAI made to its board in an X post.

“We believe this is a first essential step on a path to more stable, well-informed, and effective governance,” Nadella wrote. “Sam, Greg, and I have talked and agreed they have a key role to play along with the OAI leadership team in ensuring OAI continues to thrive and build on its mission. We look forward to building on our strong partnership and delivering the value of this next generation of AI to our customers and partners.”

The rapid reinstatement of Altman began to look like a possibility on Saturday as news surfaced that a group of prominent investors, including Microsoft, Tiger Global, Thrive Capital and Sequoia Capital were working to reverse the board’s decision from a day earlier. None of those firms had board seats, and they were caught unaware by the decision.

“OpenAI has the potential to be one of the most consequential companies in the history of computing. Sam and Greg possess a profound commitment to the company’s integrity, and an unmatched ability to inspire and lead. We are excited for them to rejoin the company they founded and helped build into what it is today,” Thrive said in a statement Wednesday.

In a post on X late Saturday night, Altman wrote, “i love the openai team so much.” Brockman, who quit the company after the board removed him as chairman alongside the ouster of Altman, reposted the comment with a heart symbol. Other OpenAI employees did the same.

OpenAI, which was reportedly in talks as recently as last month to sell employee shares to investors at an $86 billion valuation, emerged as the hottest startup on the planet after releasing its ChatGPT chatbot in late 2022. ChatGPT allows users to input simple text queries and retrieve smart and creative answers that can lead to more in-depth conversations.

Altman had been leading the company since 2019 and was serving as both the top executive of a high-flying company and the public face of artificial intelligence research and product development.

Unlike most Silicon Valley startups, OpenAI wasn’t structured like a typical corporation with large chunks of equity controlled by the founders. Rather, it was part of a nonprofit that was started in 2015. The board oversees the nonprofit, which “acts as the overall governing body for all OpenAI activities,” according to Friday’s blog post.

Sutskever and Brockman were both part of OpenAI’s founding team. Original investors included Altman, LinkedIn co-founder Reid Hoffman and Tesla CEO Elon Musk, who reportedly committed $1 billion to the project.

“Returning to OpenAI & getting back to coding tonight,” Brockman wrote in an early Wednesday X post.

Immediately after OpenAI’s board announced Altman’s firing, prominent Silicon Valley investors and founders loudly voiced their concerns and even compared the move to Apple’s decision 38 years ago to fire Steve Jobs. In 1997, Jobs would return and eventually lead Apple to create the iPhone and become the most valuable company in the U.S.

“What happened at OpenAI today is a Board coup that we have not seen the likes of since 1985 when the then-Apple board pushed out Steve Jobs,” longtime startup investor Ron Conway said in an X post. “It is shocking; it is irresponsible; and it does not do right by Sam & Greg or all the builders in OpenAI.”

Former Google CEO Eric Schmidt called Altman a “hero of mine” who built a company that “changed our collective world forever.” Airbnb CEO Brian Chesky described Altman as “one of the best founders of his generation.” And venture capitalist Vinod Khosla said he is a “once in a generation CEO.”

Nadella, who made an unexpected appearance earlier this month at OpenAI’s developer conference, was reportedly surprised and upset by the announcement. His company has invested billions of dollars in OpenAI and is a close technology partner, hosting hefty GPT workloads on its Azure cloud infrastructure.

“This was the pathway that maximized safety alongside doing right by all stakeholders involved,” Shear said in an early Wednesday X post. “I’m glad to have been a part of the solution.”

WATCH: Madrona’s Matt McIlwain talks Sam Altman’s departure as OpenAI CEO

Madrona's Matt McIlwain talks Sam Altman's departure as OpenAI CEO

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Amazon’s advertising business grew 19% in the third quarter

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Amazon's advertising business grew 19% in the third quarter

Dominika Zarzycka | Nurphoto | Getty Images

Amazon’s online advertising business brought in $14.3 billion in the third quarter, up 19% year over year, in line with analysts’ estimates of $14.3 billion.

The Seattle tech giant revealed the financial results of its growing advertising unit as part of its latest earnings report Thursday. Amazon’s overall third-quarter sales were $158.9 billion, ahead of analysts’ estimates of $157.2 billion.

Amazon’s online advertising business is still a fraction of the company’s overall business, but its growth over the years has made it a major competitor to Alphabet and Meta, which lead the digital advertising market. Alphabet’s Google currently represents 27.7% of the worldwide digital advertising market, followed by Meta at 22.8% and Amazon with 8.8%, according to data provided to CNBC by Emarketer.

Meta’s third-quarter advertising revenue came in at $39.9 billion, which was up 19% compared with the year prior. That was slightly ahead of analysts’ expectations of $39.49 billion, according to StreetAccount. Ads accounted for 98.3% of Meta’s overall third-quarter revenue.

Alphabet generated $65.85 billion in third-quarter ad revenue, the company reported Tuesday. That was up 10% from $59.65 billion the year prior. Additionally, advertising sales for the company’s YouTube unit rose 12% year over year to $8.92 billion.

Jefferies' Brent Thill on Microsoft & Meta earnings: AI expectations for investors got overinflated

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Intel shares jump 9% on earnings beat, uplifting guidance

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Intel shares jump 9% on earnings beat, uplifting guidance

Intel CEO Pat Gelsinger holds an artificial intelligence processor as he speaks during the Computex conference in Taipei, Taiwan, on June 4, 2024.

Annabelle Chih | Bloomberg | Getty Images

Intel shares rose 9% in extended trading on Thursday after the chipmaker reported better-than-expected revenue and issued quarterly guidance that topped estimates.

Here’s how the company did in comparison with LSEG consensus:

  • Earnings per share: Loss of 46 cents adjusted
  • Revenue: $13.28 billion vs. $13.02 billion expected

Intel’s revenue declined 6% year over year in the quarter, which ended on Sept. 28, according to a statement. The company registered a net loss of $16.99 billion, or $3.88 per share, compared with net earnings of $310 million, or 7 cents per share, in the same quarter a year ago.

As part of its cost reduction plan, Intel recognized $2.8 billion in restructuring charges during the quarter. There were also $15.9 billion in impairment charges.

Intel has been mired in an extended slump due to market share losses in its core businesses and an inability to crack artificial intelligence. CEO Pat Gelsinger revealed plans during the quarter to turn the company’s foundry business into an independent subsidiary, a move that would enable outside funding options.

CNBC reported that Intel had engaged advisors to defend itself against activist investors. In late September, news surfaced that Qualcomm reached out to Intel about a possible takeover.

The Client Computing Group that sells PC chips recorded $7.33 billion in revenue, down about 7% from a year earlier and below the $7.39 billion consensus among analysts surveyed by StreetAccount.

Revenue from the Data Center and AI segment came to $3.35 billion, which was up about 9% and more than the $3.17 billion consensus from StreetAccount.

Intel called for fiscal third-quarter adjusted earnings of 12 cents per share and revenue between $13.3 billion and $14.3 billion. Analysts had expected 8 cents in adjusted earnings per share and $13.66 billion in revenue.

During the quarter, Intel announced the launch of Xeon 6 server processors and Gaudi artificial intelligence accelerators.

As of Thursday’s close, Intel shares were down about 57% in 2024, while the S&P 500 index had gained 20%.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

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Microsoft’s stock has worst day in two years after disappointing forecast

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Microsoft's stock has worst day in two years after disappointing forecast

Microsoft CEO Satya Nadella speaks at a company event on artificial intelligence technologies in Jakarta, Indonesia, on April 30, 2024.

Dimas Ardian | Bloomberg | Getty Images

Microsoft‘s better-than-expected earnings report wasn’t enough to prevent the stock’s steepest sell-off in two years, as investors instead focused on the company’s forecast for the current period.

Microsoft shares fell 6% on Thursday and headed for their worst day since Oct. 26, 2022, when they dropped 7.7%. That was a month before the public release of ChatGPT from Microsoft-backed OpenAI, a launch that set the stage for a boom in artificial intelligence investments.

For the period ending in December, Microsoft called for revenue in the range of $68.1 billion to $69.1 billion, implying 10.6% growth at the middle of the range. Analysts surveyed by LSEG were looking for $69.83 billion in revenue.

Revenue in Microsoft’s cloud infrastructure business, Azure, increased 33%. CFO Amy Hood said on a call with analysts that growth, in constant currency, will come in at 31% to 32% in the fiscal second quarter.

On Tuesday, Google reported 35% annual growth in its rival cloud business to $11.35 billion. Amazon, which leads the cloud infrastructure market, is scheduled to report results after the close on Thursday.

“We view Q1 results as solid across the core Azure and Office growth businesses, though tempered by a softer Q2 outlook,” analysts at BofA Global Research wrote in a report on Thursday. They still recommend buying the stock.

Fiscal first-quarter revenue increased 16% from a year earlier to $65.59 billion, exceeding the average analyst estimate of $64.51 billion, according to LSEG. Earnings per share of $3.30 topped the $3.10 average estimate.

Net income rose 11% to $24.67 billion from $22.29 billion in the year-ago quarter.

Jefferies' Brent Thill on Microsoft & Meta earnings: AI expectations for investors got overinflated

Outside suppliers are late in delivering data center infrastructure to Microsoft, meaning the company won’t be able to meet demand in the fiscal second quarter.

“I feel pretty good that going into the second half of even this fiscal year, that some of that supply-demand will match up,” CEO Satya Nadella said on the earnings call.

Microsoft’s AI investments continue to be a major focus for investors, as the company builds out its infrastructure and ramps up chip spending to handle heftier workloads. Microsoft has invested close to $14 billion in OpenAI, which was valued at $157 billion in a financing round earlier this month.

Hood said on the call she expects the company to take a $1.5 billion hit to income in the current period, mainly because of an expected loss from its investment in the AI startup.

Meanwhile, spending on property and equipment grew 50% year over year to $14.92 billion. The consensus among analysts polled by Capital IQ was $14.58 billion.

As of Thursday’s close, Microsoft shares were up a little over 8% for the year, while the Nasdaq has risen 21% during the same period.

— CNBC’s Ari Levy contributed to this report.

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