Image Credit: DLD Conference
We have talked about ChatGPT a lot – the generative AI that sparked a new and persisting obsession with artificial intelligence. We have not talked about OpenAI, the company behind ChatGPT that much but there have been boardroom squabbles we need to touch on.
OpenAI was founded by a group of people, including Elon Musk and eventual CEO Sam Altman. The latter is at the centre of the chaos we saw at OpenAI these past few days.
The other thing we should keep in mind is that Microsoft has a 49% stake in OpenAI.
It was all systems go at OpenAI for years until out of the blue, on the 17th of November 2023, the board fired long-time CEO Sam Altman. That came as a surprise to Altman, other OpenAI executives and even major shareholder Microsoft.
Why did they fire him? They said he was not consistently candid in his communications with the board of directors. As a result, they lost confidence in him.
However, it was later revealed that he had massive disagreements with the board on AI safety, the speed of development of the technology, and the commercialization of the company.
When the board ousted Altman, Greg Brockman, one of the co-founders who also served as President resigned saying, “We’ve been through tough and great times together, accomplishing so much despite all the reasons it should have been impossible. But based on today’s news, I quit.”
It wasn’t just Brockham, other employees were not happy with the sacking of Altman. 747 out of 770 employees signed a letter threatening to quit if Altman was not reinstated.
Of course, the investors were not thrilled either, as you would expect. They were blindsided and now they were looking at a potential mass exodus which would no doubt doom the company. The investors urged the board to reinstate Altman.
Microsoft said, “Surprises are bad and we just want to make sure that things are done in a way that will allow us to continue to partner well. This idea that somehow suddenly changes happen without being in the loop is not good and we will definitely ensure that some of the changes that are needed happen and we continue to be able to go along with the partnership with OpenAI.”
Khosla Ventures, another investor wrote, “To be clear, Khosla Ventures wants (Sam Altman) back at (OpenAI) but will back him in whatever he does next.”
The board had to sit down with the CEO they ousted. Altman went back to OpenAI, posting a picture of himself wearing the visitors’ badge as they tried to talk it out. They were not able to come to an agreement and it was reported that Altman would not be rejoining the company.
Microsoft scoops in
Microsoft CEO then announces that Sam Altman, Greg Brockman and some other guys will be joining Microsoft. Altman is set to lead a new advanced AI research team at Microsoft.
However, the OpenAI saga is still not quite closed. After the Microsoft announcement that Altman would be joining them, the Verge reported that Altman is still trying to return as OpenAI CEO.
In light of that report, the Microsoft CEO said, “[We’re] committed to OpenAI and Sam, irrespective of what configuration…obviously we want Sam and Greg to have a fantastic home if they’re not going to be [at] OpenAI, with all the colleagues at Microsoft.”
What is universal though is that no one is happy with the OpenAI board. Microsoft said, “This idea that somehow sudden changes happen without being in the loop is not good.” And it seems the investors want to do something about this board.
Reuters reports that investors are consulting with legal advisors to explore their available options as they are considering legal action against the company’s board.
Even the employees want the board gone. After Microsoft announced that Altman was joining them, 505 employees warned the company that they would switch over to the new Microsoft AI team, whose operations would be headed by Altman and Brockman. They demand that the board step down or else they will follow through with their threat.
The board on its part had to appoint two CEOs in three days. The first interim CEO they installed quit and they had to appoint someone else. This second CEO was threatening to leave unless the board could show evidence of Altman’s wrongdoing.
A few hours ago we got the news that Sam Altman and Greg Brockman were reinstated. Altman returns as CEO and Brockman will likely get his Presidency back.
The board that attempted to oust Altman is the one on the chopping block. OpenAI communicated that Altman returns alongside a new board. Only one person from the old board retained their seat.
Even Microsft CEO Nadella is happy with this outcome, saying, “We are encouraged by the changes to the OpenAI board.”
What a rollercoaster ride Altman and OpenAI had in the last 5 or so days.