The former CEO and board members of the ChatGPT firm was let go last week following a review by the board of directors.
They claimed he was "consistently candid in his communications with the board."
It led to some other staff members to walkout on the company.
OpenAI's co-founder Greg Brockman is also joining him at Microsoft.
Microsoft's ongoing partnership with OpenAI is unaffected.
Microsoft CEO Satya Nadella confirmed the news on X - formerly Twitter - writing: "We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners. We look forward to getting to know Emmett Shear and OAI's new leadership team and working with them. And we’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team. We look forward to moving quickly to provide them with the resources needed for their success."
It comes weeks after Microsoft 365 Copilot was launched on November 1 for a subscription fee of $30 a month.
Whilst the powerful AI assistant has the potential to be a reliable and important step forward in the tech space, there have been quite a few who are skeptical about its significance, as well as the possibly devastating consequences.
Associate professor at Oxford University’s Institute for Ethics and AI Carissa Veliz is one such voice of skepticism, and said: “What happens if the tech fails, or it might be hacked? There might be a glitch, or they might institute new policies that you might not agree with.
“And then, if you're so hooked on the system that you feel that you can't do without it anymore, what happens then?”