OpenAI, an artificial intelligence company that started with the goal of ensuring that Artificial General Intelligence, or AGI, serves the well-being of all humanity, took a surprising turn on 17th of November, 2023. The board of directors made a significant decision. They removed Sam Altman, the co-founder and CEO, due to a lack of confidence in his leadership. But how? You see, OpenAI has this unique and a bit convoluted structure to keep the big investors from pulling the strings.
There are two main parts: OpenAI Inc, a nonprofit run by the Board of Directors, and OpenAI Global LLC, a cap profit company owned by OpenAI Incorporated. Here’s the twist. OpenAI’s rulebook, crafted in January 2016, says that most of the Board of Directors can kick out any director without any warning or formal meeting whatsoever. Just with a little bit of written consent, And obviously, this rule book gave the board a wide power range to pink-slip their own CEO and co-founder. Altman brought OpenAI from nothing to over a $90 billion company, and you would be surprised to know that he owned no shares at all in OpenAI. This is not the first time a CEO was fired from his own company.It has happened before with Apple’s co-founder and CEO, Steve Jobs, Twitter’s co founder, Jack Dorsey, Uber, and many others. But Sam Altman’s saga has much more drama to it.
Board Fires Sam Altman, 17th November 2023, Noon
On 17th of November 2023, Sam receives a message from OpenAI’s chief scientist, Ilya Sutskever, to join a Google Meet at noon. Sam shows up to the virtual meeting, and there’s the whole board except for Greg Brockman, who is also the co-founder and the President of the company. So things are a little bit strange. Ilya breaks the news to Sam. He’s out. Out of the nonprofit he co-founded and turned into a for-profit behemoth valued at around $90 billion. Soon after Sam’s call, Greg Brockman receives a call from Ilya as well at around 12:23 PM PST, finding out that he was being removed from the board but will remain his role as president, somehow as he was vital to the company. This is why Greg was not present on the fateful call with Sam. He too, was quite blindsided with the entire move. Around 12:30 PM PST, the board put out a blog post on their official website and announced the seemingly haphazard decision. In the blog post title, ‘OpenAI Annonces Leadership Transition,’ the company declared that Sam Altman will depart as CEO and leave the board of directors as well.
The reason presented for Sam’s departure was that he was not consistently candid with his communications with the board, hindering its ability to exercise responsibilities. This is corporate lingo for ‘Sam lied to us.’ There was no further clarification to this, and this is exactly where the entire world lost its collective mind. Meera Murati, the company’s Chief Technology Officer, was to serve as interim CEO, effective immediately. She, too, was presented with this news by the board on a very short notice around the same time of the blog post. Bear in mind that Microsoft, the company holding 49% stake in OpenAI’s capped profit entity, had not been informed of this decision until about five minutes before the blog was posted around 12:30 PM PST. All of this within a span of 30 minutes. This corporate governance is unheard of under normal circumstances, but these weren’t normal circumstances. This was a coup.
Greg Brockman Quits, 17th November, 2023
Meanwhile, Altman acknowledged that he was leaving OpenAI but said nothing about the board’s accusation, instead stating that he will have more to say about what’s next later in a tweet. Now, Microsoft has invested $10 billion in OpenAI by this point and provided its Azure cloud platform to run and scale the processor-intensive models to create ChatGPT, DALL-E, and other products offered by OpenAI.
Investors at Microsoft could be understandably concerned about this investment, and Satya knew this. At 03:25 PM, PST, Satya Nadella reaffirmed the company’s partnership with OpenAI and its commitment to delivering the benefits of AI technology. While Satya was calming down the investor community at around 4:00 PM, PST, barely 30 minutes after Satya’s tweet, shocked and disappointed by the board’s abrupt move, OpenAI’s co-founder and President, Greg Brockman, shared the message on X, he sent to the OpenAI team about his decision to quit. Brockman tweeted, “Super proud of what we have all built together since starting in my apartment eight years ago. But adding that, based on today’s news, I quit.”
OpenAI employees are officially informed about Sam’s dismissal, 18th November 2023
The next day, OpenAI’s Chief Operating Officer, Brad Lightcap, sent out a memo about Sam’s dismissal to all OpenAI employees. He categorically mentioned that the board’s choice was not influenced by any wrongdoing or matters related to the company’s finance services, business operations, safety measures, or security and privacy practices. So, if those weren’t the reasons, then what was it that forced the board for such a drastic measure?
Investors Support for Sam Altman
On the next day, a few other researchers joined hands with their leader and decided to quit, too. As reported by The Information, Jakub Pachocki, the Director of Research at OpenAI, Aleksander Madry, the Head of Team that Analyzes AI Risks, and Szymon Sidor, a researcher who had been at the firm for seven years told associates at OpenAI that they too had quit. Some investors and employees, along with key supporters like Microsoft, Tiger Global, and venture firm Thrive Capital, began inserting pressure on the boards to restore Sam as the CEO again. The biggest names in Silicon Valley took to social media to express support for Altman. The following day witnessed a wave of encouragement for Altman from OpenAI staff, with many others tweeting, “OpenAI is incomplete without its people.” Additionally, several employees responded with heart emojis to another tweet by Altman, affirming, “I love the OpenAI team so much.”
Satya Nadella Announces Joining of Altman and Greg to Microsoft, 19th November 2023
On Sunday night, Satya Nadela announced the joining of Altman and Greg to lead a new AI research team at Microsoft. It made sense for both Microsoft and Sam and his team to join hands. This protected Microsoft from anguish of their shareholders while also giving a huge leverage to Sam and his team to negotiate his return to the OpenAI with his board. Elon Musk chimed on this news with a tweet saying, “How Sam and Greg will use Teams now instead of Google Meet.”
Emmett Shear, OpenAI’s New Interim CEO, 20th November 2023
The Monday started with another announcement that OpenAI is hiring Emmet Shear as the new interim CEO of OpenAI instead of Mira. Somehow, OpenAI board managed to fight two CEOs in the span of 48 hours, and yet again, we don’t know why. Anyway, Emmet Shear is the former CEO of Twitch, a video game livestreaming platform. Shear was informed about his hiring on a call he probably received on the late night of Sunday. Following these developments, the OpenAI employees teamed up and gave an ultimatum to the board, outgoing the call. Out of the 770 employees, 738, that’s 95% of the staff, ended up signing a letter asking the board to either step down from their positions or face a mass exodus of OpenAI staff to Sam Altman’s new venture at Microsoft. Among the signatories are some of the most senior executives of OpenAI, including Mira Murati, the erstwhile CTO, and the board appointed interim CEO. At least now we know why the board had to find another interim CEO, right?
Ilya Sutskever Regrets, 20th November 2023
The bigger shock was Ilya Sutskever, the same Ilya that fired Sam in the first place, along with the other board members, of course. The letter accused the board members of being incapable of overseeing OpenAI. It also revealed that Microsoft has assured the signatories that they would be welcome to join the new subsidiary that Altman is creating if they choose to join. Ilya then tweeted his regret for participating in the board’s decision and explained that he never intended to harm OpenAI, that he loves everything they have built together and do everything to reunite the company. At this point, even Elon Musk questioned Ilya directly, why does he take such drastic decisions? But more importantly, Elon asked, if OpenAI is doing something dangerous, the world needs to know. Sam, Greg, and a few other employees and CEOs appreciated Ilya’s apology on Twitter by sending out heart emojis. Sam Altman, in a series of tweets, communicated a message of unity and commitment towards OpenAI’s ongoing operations and his partnership with Microsoft. In one of those tweets, Altman underscored the shared priority between him and Microsoft CEO, Satya Nadella, to ensure the flourishing future of OpenAI. Considering all the dramatic twists, the board had to take note of it, and now Sam might have to delete this tweet that he posted on Sunday.
Why? Because finally, the board caved in and OpenAI announced on Wednesday that it has reached an agreement for Sam Altman to return as CEO reshuffled board consisting of Bret Taylor, Larry Summers, and Adam D’Angelo. In this whole story, the main question remained unanswered. Why was Altman fired in the first place? The internet is no stranger to conspiracy theories, so here are more refined ones.
The Conspiracy theories
- “Not Consistently Candid”- According to the board’s blog post. Sam was not entirely truthful with the board members regarding something. Either there was probably a blatant lie a white lie or maybe a lying by Omission. Maybe the AI is sentient of something and he didn’t tell the board yet. This is quite unlikely since such developments are almost impossible to keep under the wraps in a company with 770 employees or maybe the board was hinting towards Sam other extracurricular activities like building a chip company with money from Middle East backers to build a chip that is focused on AI and can compete against the likes of Nvidia.
- Quora me This: Poe.ai?- Another theory is that board member Adam D’Angelo’s company Quora launched an AI Marketplace called POE back in December 2022. Earlier in the month Sam launched GPT Marketplace on OpenAI’s dev conference making it a direct and arguably a superior competitor to Quora’s own solution rendering POE kind of obsolete. And he did it quite quickly right under the board’s nose or maybe Sam did promise not to launch it and did it any way angering D’Angelo leading up to his firing. But this Theory got canned by the middle of the week since D’Angelo is the only board member who was not replaced not to mention that firing Sam needed a majority of the board members to be in favor. I doubt they’d fire Sam just because Quora is also valuable to them. right?
- Staged- The third theory is a bit out there that says all of this was staged to change the nonprofit status of OpenAI and solidify it’s for-profit status by giving the CEO the powers of a typically funded for-profit startup not unlike Facebook or Microsoft in its early days. This seems a bit unfeasible since it needs to be choreographed and coordinated to the team. Also, how many people are supposed to be in on it even the big names taking Sam’s side on Twitter. Public opinion could have swung in either direction right. Especially given what Elon shared later in the conversation. If this is true is the unverified letter shared by Elon a part of the setup or despite it or was it a last Fighting Chance against whatever was happening behind open a closed doors. The letter that Elon shared allegedly sent to him by a group of anonymous ex-employees says things like, “We believe that a significant number of OpenAI employees were pushed out of the company to facilitate its transition to a for-profit model this is evidenced by the fact that OpenAI’s employee attrition rate between January 2018 and July 20120 was in the order of 50% Throughout our time at OpenAI we witnessed a disturbing pattern of Deceit and manipulation by Sam Altman and Greg Brockman, driven by their insatiable pursuit of achieving artificial general intelligence AGI. Their methods, however, have raised serious doubts about their true intentions and the extent to which they genuinely prioritize the benefit of all Humanity. This is quite a daming testimony if it is true. If you want to see the whole thing for yourself, you can find that letter here.
The whole Fiasco was born out of worries by Tasha and Helen who thought that Sam was maybe getting too commercial with OpenAI. Maybe stay too far away from the original Mission of the nonprofit that was supposed to be more responsible towards AI development for the good of the world or was it some kind of superiority complex stemming from their effective altruism background. At least Vinod khosla of khosla venture definitely seems to think so when he said,
“..there are some errent people on the board who misinterpreted their own religion around EA or effective altruism..”
Whether Tasha and Helan had legitimate fears on legitimate grounds or if it was mere a shocking and errant Behavior as Mr Khosla puts it, we might actually never know. But it might be too soon to write about Tasha and Helen because, if you read the article by The Information and Reuters, Sam and his team seemed to be on a huge breakthrough in the artificial general intelligence side of things, to the extent that Sam himself had to say this on stage at the Asia Pacific economic cooperation Summit in San Francisco,
“four two times now, In the history of OpenAI the most recent time was just in the last couple of weeks. I’ve gotten to be in the room we sort of push the veil of ignorance back and the frontier of Discovery forward, and getting to do that is the professional honor of a lifetime..”
This was one day before he got fired by the board. Yeah so that happened! either way it’s all conjecture at this point because what matters now is that the ultimate winner here is Microsoft. They strongly projected two things. They have full access and control of the two hottest Commodities in Tech, OpenAI the organization as well as the maker of the tool, Sam Altman. This showed the world and its investor that Microsoft is going to maintain its lead in AI and associated tools. It’ll be interesting to see if this image holds up or will they stand challenged by expected and unexpected players if you too are committed to the AI mission in your organization feel free to reach out to us for all things AI on kshitij@esycommerce.com.
