A mutiny is brewing at OpenAI after the company's board refused to bring back Sam Altman and Greg Brockman - 505 out of 700 employees have asked the company's board to resign.

While Altman has been hired by Microsoft Corp. (MSFT  ) now, OpenAI's senior executives, engineers, and researchers are openly voicing their protest now.

The Satya Nadella-led Microsoft is OpenAI's single largest investor, with a 49% stake.

Update: According to veteran journalist Kara Swisher, 505 out of 700 employees have co-signed a letter asking the OpenAI board to resign.

"Your actions have made it obvious that you are incapable of overseeing OpenAI. We, the undersigned, may choose to resign from OpenAI and join the newly announced Microsoft subsidiary run by Sam Altman and Greg Brockman," the letter says.

The letter says Microsoft has assured that there are positions for all OpenAI employees at the new AI subsidiary. They have demanded the resignation of the existing OpenAI board, reinstatement of Altman and Brockman, and appointment of two new lead independent directors, Bret Taylor and Will Hurd.

Interestingly, Ilya Sutskever, who led the firing of Altman and Brockman, has co-signed this letter, too.

What Happened: In what could prove to be a disastrous move for the leader in the AI industry, OpenAI's board has more trouble on its hands, with dozens of employees either quitting or publicly protesting against it.

This includes Mira Murati, the CTO of OpenAI, who was also appointed as the interim CEO before Emmett Shear replaced her.

Brad Lightcap, the company's chief operating officer, Jason Kwon, the chief strategy officer; and other staff, including engineers, researchers, and those from the product team, all joined in to support Altman, Brockman, and other OpenAI employees who were either fired or quit the company in protest.

Interestingly, all the protesting posts say the same thing: "OpenAI is nothing without its people."

Altman acknowledged many of these posts, reporting their messages with the "heart" emoji.

Why It Matters: It's unclear what these employees at OpenAI are asking for right now.

Both Altman and Brockman, apart from their former OpenAI colleagues, have been scooped up by Microsoft in a shock announcement by its CEO Nadella.

For what it's worth, OpenAI's new CEO, Shear, has dismissed rumors that Altman was fired due to AI safety concerns. He has also said the board's strategy also involves commercializing AI.

This clears the air on two aspects that were being widely speculated as the possible reasons behind Altman's firing.

With Altman finding a home in Microsoft, how OpenAI deals with the mutiny on its hands remains to be seen now.