In a surprising twist to recent developments in the AI world, Microsoft CEO Satya Nadella announced that Sam Altman, co-founder of OpenAI, will lead a newly established in-house artificial intelligence team at Microsoft. The announcement follows Altman’s unexpected ousting from OpenAI last week. Nadella also revealed that Greg Brockman, another OpenAI co-founder who departed after Altman’s exit, will join the initiative, signaling Microsoft’s commitment to accelerating its AI ambitions.

Nadella, writing on LinkedIn, emphasized that Microsoft will provide Altman and Brockman with the resources necessary to succeed. In a post on X (formerly Twitter), he confirmed that Altman will serve as CEO of the new group. “We remain committed to our partnership with OpenAI and our innovative roadmap, as announced at Microsoft Ignite,” Nadella wrote, reiterating Microsoft’s dedication to supporting its customers and partners amid the transition.

This move comes after a tumultuous weekend that shook the tech world. On Friday, Microsoft was reportedly caught off guard by OpenAI’s decision to remove Altman, a figure closely linked to Microsoft’s $13 billion investment in the AI startup. The sudden announcement caused an initial dip in Microsoft shares, but Nadella’s decisive action helped reverse market sentiment, with shares rising 2.7% in premarket trading on Monday.

OpenAI’s board later appointed former Twitch CEO Emmett Shear to lead the company, surprising Microsoft executives, who had expected a resolution reinstating Altman and Brockman. Sources close to the matter revealed Microsoft had lobbied for Mira Murati, OpenAI’s interim CEO, to facilitate their return in some capacity.

Microsoft’s partnership with OpenAI has been central to its AI strategy, with OpenAI’s technology integrated across Microsoft’s product ecosystem. Despite this, the establishment of an Altman-led AI team introduces questions about how Microsoft will balance its ongoing collaboration with OpenAI against its own in-house projects.

Nadella pointed to examples like LinkedIn and GitHub—Microsoft-owned companies with independent leadership and cultures—as a potential model for this dual approach. However, the move may spark tension among Microsoft’s internal AI teams, some of whom have expressed frustration over the prioritization of OpenAI’s tools over homegrown innovations.

While it remains unclear how many former OpenAI employees may join Altman and Brockman at Microsoft, Nadella hinted at more to come. “Colleagues of Altman and Brockman will follow,” he said, indicating that Microsoft’s new AI division could become a magnet for top talent in the industry.

As Microsoft navigates this delicate balancing act, it aims to solidify its leadership in artificial intelligence while maintaining its strong partnership with OpenAI. For now, Nadella’s bold move positions Microsoft to remain at the forefront of AI innovation in a rapidly evolving landscape