If you’d never heard of OpenAI before last week, you probably have now. The level of attention given to recent mayhem at the company leading the AI boom underscores how much this moment has captured the collective imagination.
Last Friday, OpenAI’s board of directors fired the company’s cofounder, CEO, and fellow board member, Sam Altman. The decision was led by OpenAI cofounder and chief scientist, Ilya Sutskever, and three independent board members. Greg Brockman, cofounder and OpenAI president, was also forced out as chairman and chose to resign instead of remaining at the company. Altman was replaced by interim CEO Mira Murati, formerly the company’s CTO.
It was a shocking turn of events for the hottest thing in tech. And rumors swirled in the vacuum left by a vague statement explaining the decision. But these were only the first shots in the neck-snapping round of power ping-pong to come.
Over the weekend, details emerged that the board’s decision was not due to “malfeasance” on Altman’s part. Altman was said to be negotiating a return as CEO; then he was considering founding a new AI startup with Brockman; then the two were headed to Microsoft, after CEO Satya Nadella said he’d hire them to lead a new AI lab at his company.
On Monday, interim CEO Emmett Shear—the former CEO of Twitch who’d replaced Murati the night before—was facing open revolt. Over 95 percent of OpenAI employees signed a letter demanding the board resign and Altman be reinstated. If that didn’t happen, they would follow him to Microsoft, which was offering jobs and matching compensation. Also signing the letter were Murati and Sutskever, who now said he regretted his involvement in the board’s decision to remove Altman.
Finally, Tuesday night, after earlier rumors that negotiations were back on, the company announced the various parties had reached a tentative agreement to rehire Altman as CEO.
Two original board members would depart—Helen Toner, a director of strategy at Georgetown University’s Center for Security and Emerging Technology, and Tasha McCauley, an entrepreneur and researcher at RAND Corporation—while Quora CEO Adam D’Angelo would stay on. The company would also add two new board members—the economist Larry Summers and former Salesforce co-CEO Bret Taylor (as chairman)—and likely expand the board further at some point in the future. There would also be an independent investigation into Altman’s conduct and the process by which he was removed.
That’s what we know. But the unpredictability of events so far suggests the story isn’t over. Here’s what we still don’t know and what might be next.
How OpenAI Is Organized
The events of the last five days are extraordinary in the world of tech, not least because founders usually hold significant power on their own boards.
But OpenAI is different.
The company was originally founded in 2015 as a nonprofit with the audacious mission of building artificial general intelligence broadly beneficial to humankind. They hoped that by divorcing the organization’s mission from financial incentives, both goals could be achieved.
But in 2018, OpenAI leaders realized they needed a lot more computing power and financial backing to make progress. They created a capped-profit company—controlled by the nonprofit board and its mission—to work on commercializing products and attracting talent and investors. Microsoft led the way and has poured over $10 billion into the company.
Crucially, however, Microsoft and other investors had little control over the business in the traditional sense. The buck stopped with the non-profit board.
Then came ChatGPT. The chatbot sensation kicked off a hype cycle not seen in years (which is saying something). With Altman at the helm, OpenAI has pushed to commercialize ChatGPT at a rapid pace, culminating in its first developer conference earlier this month but also putting significant strain on the company’s non-profit mission.
What We Don’t Know
All this set the stage for Altman’s sudden ouster and comeback. But not every detail is in stone yet, and more of the story is likely to unfold in the days ahead.
Let’s lay some of that out.
The current agreement looks durable, but given recent history…
The wording used to describe Altman’s return as CEO isn’t ironclad. The phrase “agreement in principle” means it could yet unravel. But though the details are still being hammered out, given intense pressure from investors and employees, it appears very likely the path of least resistance will be to keep the team together and move on.
The board’s reasons for acting have not been confirmed in detail.
There’s been plenty of speculation and commentary from sources about why the board chose to fire Altman.
One explanation is the growing tension between the board’s mission to keep AI safe and the company’s commercial activity and pace of development boiled over. Sutskever and fellow board members Toner, McCauley, and D’Angelo were focused on minimizing AI risk, a crucial part of the non-profit’s mandate. They believe AI must be developed with the utmost care lest it cause irreparable damage to society at large. The heavy push to move fast and sell products is at odds with this view. It’s a schism that extends beyond OpenAI to the tech community more generally.
Reports also suggest Altman’s other activities in the area—like an AI chipmaking project and his rumored talks with Jonny Ive about an AI device—or recent breakthroughs that haven’t yet been announced may have contributed to the decision as well. But utimately, we don’t know, and so far, official details have yet to be shared by those involved.
How the company will be organized in the future is TBD.
The company called the new roster of board members “initial,” suggesting it could grow. If OpenAI’s organizational structure brought on the chaos, it’s reasonable to expect investors will demand change. After watching the company nearly evaporate, an expanded board may offer seats to those with financial stakes in the company, and its structure may be reworked. But again, the details have yet to be ironed out. For now, it remains an open question.
The last five days seem to have blindsided pretty much everyone, but that, itself, is somewhat surprising. OpenAI’s organizational structure was no secret. Nor was the inherent tension between its mission and commercial activities. Now it seems nearly certain, however, that the tension between the two will yield to financial forces.
Altman has been vocal about his desire to keep AI safe: It’s a reason he helped found the company. But he’s also pushed OpenAI to do business in the name of progress. As the organization continues to work with Microsoft and court new investors—a deal with Thrive Capital valuing the company at $80 billion was in the works before the madness—guardrails, assurances, and more control will likely be pre-requisites.
“I think we definitely would want some governance changes,” Microsoft CEO, Satya Nadella, told Bloomberg News Monday. “Surprises are bad, and we just want to make sure that things are done in a way that will allow us continue to partner well.”
Perhaps this outcome is just confirmation of how things already stood, despite OpenAI’s organizational structure. That is, the company and nearly all involved were already operating as if it were a more traditional for-profit venture.
Meanwhile, though the board’s actions might have been motivated by a desire to slow things down, they may end up having the opposite effect. OpenAI is set to pick up where it left off: Same CEO, team, investors, products, and pace but perhaps fewer dissenting voices.
It also means those worried about the most advanced AI being controlled by a handful of corporations will push more urgently for regulation, call on governments to better fund academic research, or put their faith in open-source AI efforts as a counterbalance.
No matter the exact outcome—expect the wild ride in AI to continue.
Image Credit: OpenAI