OpenAI board faces growing revolt over Sam Altman’s ousting

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OpenAI board faces growing revolt over Sam Altman’s ousting

21 November 2023 Technology & Digitalization 0

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OpenAI faced a growing revolt among staff and investors calling for the resignation of three directors after a botched boardroom coup ousted chief executive Sam Altman from the world’s leading artificial intelligence company.

Employees said in a letter to the board that the directors had “undermined our mission and company” by the way they fired Altman and his co-founder Greg Brockman on Friday. One person with direct knowledge of the matter said 747 employees out of 770 had called for the board to quit as of 6pm local time on Monday. OpenAI did not respond to confirm the figure.

The turmoil marks a stunning reversal for a group that catapulted generative AI into the mainstream with the launch of its ChatGPT chatbot nearly a year ago. Until last week, OpenAI was viewed as the global leader in developing and commercialising the technology, which has drawn billions of dollars in investment and is upending businesses worldwide. Now, its very future has been called into question.

After abortive talks to reinstate Altman on Sunday, in which he demanded the board resign as a price for his return, OpenAI’s board turned instead to Emmett Shear, co-founder of video-streaming service Twitch, as interim chief executive. Microsoft, the software company that is OpenAI’s biggest investor, announced it had hired Altman and Brockman to head a new AI unit.

Altman indicated on Monday that he expected OpenAI to endure and was working with Microsoft chief executive Satya Nadella to secure the start-up’s future.

“[W]e are committed to fully providing continuity of operations to our partners and customers [and] the openai/microsoft partnership makes this very doable,” Altman posted on X. It was “one team, one mission”, said the 38-year-old entrepreneur.

In an interview with Bloomberg on Monday, Nadella could not say who would be the chief executive of OpenAI on Tuesday but said he would leave the decision “to OpenAI and its board”. 

He added that Altman would be able to pursue his side projects while working at Microsoft. Altman has a nuclear fission venture and a cryptocurrency project and has sought to start a device company and a chip business, according to people with knowledge of the matter. “We’ll work through the governance aspects of it,” Nadella said.

The hundreds of OpenAI staff who signed Monday’s letter said they had been offered positions in the new unit at Microsoft, and “will take this step imminently, unless all current board members resign, and the board appoints two new lead independent directors”.

Altman and Brockman were removed by the board’s four other members on Friday. By Monday, one of those board members, Ilya Sutskever, had aligned himself with the employees.

Sutskever, OpenAI’s chief scientist, signed the letter from staff after first apologising on social media for his role in firing Altman.

Read the open letter, signed by hundreds of OpenAI’s 770 employees

“I deeply regret my participation in the board’s actions,” he wrote on X. “I never intended to harm OpenAI. I love everything we’ve built together and I will do everything I can to reunite the company.”

The other remaining directors are Adam D’Angelo, the chief executive of Quora; technology entrepreneur Tasha McCauley; and Helen Toner from the Center for Security and Emerging Technology.

Some of OpenAI’s most prominent venture investors were holding out hope Altman would return. The company’s board had made a “grave miscalculation”, wrote early OpenAI backer Vinod Khosla in a scathing editorial in The Information on Monday. Khosla later called on Shear to resign.

“Every problem has a solution,” Thrive Capital founder Josh Kushner wrote on X. Thrive is lined up to be the lead buyer in a sale of up to $1bn of OpenAI employees’ stock to investors, which had been expected to close in the coming weeks. That sale, a chance for staff to cash in on OpenAI’s success, was expected to give the company an $86bn valuation, people with knowledge of the plans said.

The share sale was now in the balance, with the weekend’s drama representing a material change in circumstances, but could yet go ahead should Altman return, said one person with knowledge of the situation.

Rivals meanwhile are seeking to capitalise on the disarray within the company. In a social media post on Monday, Marc Benioff, chief executive of software company Salesforce, asked OpenAI researchers to send him their CVs and offered to match their salaries.

The exact reason for Altman’s ousting remains unclear, with OpenAI’s board saying only that he had not been “consistently candid”. One person with direct knowledge of the board’s decision said “the board reached the point where they couldn’t believe what Sam told them”.

Shear, who has publicly called for a slower rollout of AI, tried to quell reports that a dispute over safety was part of the argument. “The board did *not* remove Sam over any specific disagreement on safety,” he wrote on X. “I’m not crazy enough to take this job without board support for commercialising our awesome models.”

Shear wrote that he would hire an independent investigator to report on “the entire process leading up to this point” and could push for “significant governance changes if necessary”.

Nadella said his company remained committed to its partnership with OpenAI and was looking forward to working with Shear and its new leadership team.

Microsoft has committed more than $10bn in capital and infrastructure credits to OpenAI — though not all of that capital has been drawn down — and has embedded OpenAI’s powerful generative AI tools into its own software.

Altman told the Financial Times this month he planned to raise further investment from the Seattle group, saying he had a “great partner” in Microsoft.

Shares of Microsoft closed at a record high on Monday after rising 2.1 per cent, reversing losses from late on Friday following Altman’s firing.