- Sam Altman was ousted as CEO of OpenAI after board members went against him, prompting the rest of the company to call for their ouster.
- Microsoft, OpenAI’s main investor, prevents Altman from taking its technological expertise elsewhere.
- Altman and co-founder Greg Brockman will lead a new artificial intelligence research team at Microsoft, and signs suggest they could bring in some of OpenAI’s best talent.
On the eve of November 2022 debut of ChatGPT, Silicon Valley startup OpenAI has seen an incredible rise. The unparalleled success of its AI chatbot has created a frenzy in the AI sector over the past year. However, as ChatGPT approaches its one-year milestone, OpenAI is facing internal turmoil, highlighted by the sudden dismissal of CEO Sam Altman just days ago.
The unexpected ouster of Sam Altman as CEO of OpenAI on November 17, 2023 sent shockwaves through the industry. Altman served as the human face of the generative AI revolution, even connecting with world leaders. Just a day before the ‘coup’, the co-founder and leader of OpenAI advocated the benefits of artificial intelligence for executives and global leaders at the Asia-Pacific Economic Cooperation summit in San Francisco.
He was suddenly replaced the next day. The board was tight-lipped about the reasons for his departure. However, to blog posts on OpenAI’s website, it states that the board “no longer has confidence” in Altman’s leadership because he “has not been consistently honest in his communications with the board.”
The unexpected takedown was all the more stunning, given that Altman appeared to be one at the height of its influence. After recently completing a world tour, Altman met with leaders in various countries, leading closed and open discussions about artificial intelligence. But it wasn’t long after Altman’s sudden ouster that Greg Brockman, the board chairman and another co-founder, resigned in response to the former’s firing.
— Greg Brockman (@gdb) November 18, 2023
What happened after Friday’s announcement?
When Brockman announced he will be leaving the company, also detailed how co-founder Ilya Sutskever and other board members informed Altman of the decision via a Google Meet call shortly before the announcement was made. The next day, amid a tussle on OpenAI’s board, three senior researchers resigned in response to Altman’s departure, as reported Information.
Ignoring these concerns, the board on Sunday appointed Emmett Shear, the former CEO of Twitch. All of the board’s decisions since Friday have been independent of their investors, leaving Microsoft CEO Satya Nadella in the dark. It is worth noting that Microsoft is the largest investor, with a significant investment of USD 13 billion in OpenAI.
Despite setting a Saturday 5:00 PM PT deadline for the board to reinstate Altman and Brockman, which the remaining board members ultimately missed, employees took to social media, noting that “OpenAI is nothing without its people.” By Monday morning, OpenAI employees had overwhelmingly backed Altman, with many signaling their intention to leave the company in a mass exodus.
Who is firing whom at OpenAI?
In a letter to management, the employees said the directors “compromised our mission and the integrity of our company” by firing Altman and causing his co-founder Brockman to resign on Friday. By 6 p.m. local time on Monday, Nov. 20, 747 of the 770 employees had called for their resignations from management, according to an individual with direct knowledge of the matter.
Sutskever’s name also appeared in the open letter to the board of directors, which indicates that he tricked the members of the board of directors. And this despite the fact that he played a key role in the overthrow of Altman just a few days earlier.
“I deeply regret my participation in the board’s proceedings,” Sutskever said in a post on X’s official Twitter account. “I never intended to harm OpenAI.” Another signatory was chief executive Mira Murati, who was named to replace Altman as chief executive when he was ousted on Friday but was herself ousted for the job over the weekend.
At the same time, the newly appointed CEO, Shear, faced challenges in obtaining written documentation detailing management’s rationale for Altman’s firing. The information was not revealed even to the company’s investors, various media reported, referring to sources familiar with the matter. In a memo to employees Sunday night, Shear said his top priority was to “engage an independent investigator to thoroughly examine the entire process leading up to this point and produce a comprehensive report.”
What does OpenAI have against former CEO Sam Altman?
Prior to last week’s event, OpenAI was reportedly involved in discussions to finalize a fundraising deal, potentially valuing the deal at US$80 billion.
Altman was closely associated with the triumph of ChatGPTwhich amassed 100 million users within two months of its launch on November 30, 2022.
Altman serves not only as the company’s CEO, but also as a symbol of the artificial intelligence revolution that has captivated the public and investors while raising concerns among industry insiders and experts.
The board did not provide any further details about the communication in question other than “a lack of candor in his communications with the board”, which therefore “impeded his ability to carry out his responsibilities”.
Even so, during the open OpenAI developer conference earlier this month, Altman presented a strategy for establishing an app store for AI agents. Additionally, according to BloombergAltman sought investment from Middle Eastern sovereign wealth funds for production of AI chips intended for rivals of Nvidia.
Previous reports from Information also suggested that Altman is exploring the possibility of working with former Apple designer Jony Ive to develop AI-focused hardware, potentially funded by Softbank.
Microsoft to the rescue
The the biggest investor in OpenAI, Microsoft decided to avoid Altman’s risk by applying his technology expertise elsewhere. On Monday, the former CEO of OpenAI announced that he will join the Seattle-based tech giant to lead the as-yet-unformed artificial intelligence research team.
Nadella wrote further that Altman will lead a “new advanced AI research team.” Former OpenAI co-founder Brockman will accompany Altman, and based on the number of staff members posting to X on Monday, he’ll bring some of OpenAI’s top talent with him.
We remain committed to our partnership with OpenAI and are confident in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in our continued support for our customers and partners. We look forward to meeting Emmett…
— Satya Nadella (@satyanadella) November 20, 2023
Apparently, there’s work for all the OpenAI staff if they want to join Microsoft. In an interview with CNBC, Nadella said he is open to working with OpenAI or working with OpenAI employees who come to Microsoft. “At this point … it’s very clear that something has to change about the governance (of OpenAI),” he added, saying the companies would discuss it.