OpenAI – why was Sam Altman fired?

Sam Altman

Sam Altman was fired from OpenAI, which was the big talk within IT. Later within a week on Wednesday, the news came that he would be reinstated and a new board put in place.

There is no public information, but rumors suggest that it was related to security and profit from ChatGPT. The question is what level of security made the board hit the brakes and how corporate governance has been handled in the company. The winner in the circus was surely both Sam Altman himself, OpenAI, and Microsoft, who received very significant media attention.

Altman, whose profile has been one of the industry's visionaries after the success of ChatGPT, was, in a way, OpenAI. ChatGPT has been the fastest-growing consumer application in history since its launch in November 2022

Sam Altman was the company's public face and, due to his position, was considered the foremost person in the AI world. The question draws parallels with when Steve Jobs was fired from Apple, but there are also those who think it was good because the development had been uncontrolled.

With founder Greg Brockman, initially, three senior AI developers also left when Altman resigned. The main reason seemed to be Sam Altman's commercially oriented vision for OpenAI, which diverged from OpenAI's original mission and the vision of the other four directors.

Chief Technology Officer Mira Murati, who was born in 1988 in Albania, was initially appointed as the interim CEO to lead OpenAI. Mira has been part of the company's leadership team for five years and has often been the public face, playing a central role in the development of Tesla's Model X as well. As the CTO of OpenAI, Murati has led the teams responsible for DALL-E, an AI that can generate images from prompts, and ChatGPT. Murati has also expressed concerns about the dangers that artificial intelligence can pose and has raised questions about controlling the model to fulfill intended tasks and ensure its alignment with human goals, ultimately serving humanity's interests. Murati is said to have attempted to bring Altman back as CEO. A few days later, Emmett Shear was appointed as CEO, and he has stated that he will resign if the board cannot provide evidence for why they fired Altman.

Why was Sam Altman fired?

Sam Altman's departure follows a board review process, which concluded that he was not consistently honest in his communication with the board, hindering its ability to fulfill its responsibilities. The board no longer has confidence in his ability to continue leading OpenAI. Likely, it revolves around a lack of shared vision for the organization. As OpenAI swiftly moved forward with Enterprise and the GPT marketplace, a path was charted to become one of the leading commercial technology companies.

It might be the case that these commercial decisions were made without approval from the board, thereby creating this conflict between the remaining 4 board members and Sam Altman.

November 2 showed improvements on the platform but Altman focused on resources that needed to be planned.
November 4: Ilya was worried about the research at the company.
November 6 OpenAI dev day with new features such as building your own ChatGPT. Microsoft's CEO appears at development day. After dev day, Greg and Sam are in full swing raising money. They aim for a valuation of 90 billion.
November 9 Microsoft suspends its employees from ChatGPT due to security concerns
November 13 - In an interview with the Financial Times in London, Sam confirms for the first time that work has begun on GPT5 and that he is raising money.
November 14 - OpenAI is pausing ChatGPT subscriptions, as they are completely out of capacity.
15 November - OpenAI stops all new ChatGPT plus signups.
November 17 - Ilya and describe the progress and dangers to the board. Sam points out that as a CEO, he has to stay ahead of the team and manage the news flow in advance of the team's needs. "We will need more money for more data centers." A vote is held. Sam is deposed. The board demotes Greg, who is not present at the meeting because Sam is authorized to vote for him.
Source: X

The day after he was fired, he shared this on the X platform.

Who owns OpenAI?

It is a fairly narrow organizational structure where the board of directors controls OpenAI. OpenAI is owned by its board of directors and ownership is held by a non-profit organization called “OpenAI LP.”

The organization's mission is to ensure that artificial general intelligence (AGI) benefits all of humanity. It operates with the goal of promoting the responsible development and use of AI technology.

Microsoft's major investment in the platform

Microsoft originally invested $1 billion in OpenAI in July 2019. and earlier this year had invested $10 billion in the organization and had a minority stake in the company. Microsoft would receive 75 percent of OpenAI's profits until they recoup their investment, after which they would have a 49 percent stake in the company.

Satya Nadella, CEO of Microsoft and a lead investor in OpenAI, has praised Murati in a profile in Time. He praised her commitment to making AI accessible to a wider audience, her skill in bringing together multifaceted teams, and her fearless approach to tackling technical challenges.

A piquant detail is that the board did not use Microsoft Team but Google Hangout in the meeting they had with Altman. CEO Satya Nadella learned the information that Altman was fired 1 minute before it became public. In the first instance, it sounded like they were trying to blow Microsoft. In a later situation, all employees were offered to start at Microsoft. Looks like Sam Altman & Greg Brockman's deal to join Microsoft is far from secure. Microsoft may request more seats on OpenAI's board.

Who founded OpenAI?

OpenAI was founded by a group that included Elon Musk, Sam Altman, Greg Brockman, Ilya Sutskever, Wojciech Zaremba and John Schulman. Reid Hoffman and Peter Thiel were also early contributors to OpenAI and helped support the organization in its early stages. According to Elon Musk, the recruitment of Ilya as a co-founder was "truly critical to OpenAI's success".

There are venture capital (VC) funds that have been involved in supporting OpenAI through investments. One example is Khosla Ventures, which is a VC fund that has invested in OpenAI to support its work in artificial intelligence and artificial general intelligence (AGI). Venture capitalists and key investors in OpenAI still don't know why Sam was fired. Some investors are now considering suing OpenAI's board.

Sam Altman, Peter Thiel and Reid Hoffman are prominent investors and entrepreneurs with their own venture capital funds, and they have also been committed to supporting OpenAI through their own fund investments. Their personal commitment and financial support have been significant in strengthening OpenAI's work in the field of artificial intelligence and artificial general intelligence (AGI). Their funds' investments have contributed to enabling research and development in this important area. It is likely that it is the founders who decided who should sit on the board.

Will Altman be reinstated as CEO?

OpenAI investors worked over the weekend to wind up the company's board and restore Sam Altman to his position as CEO after the weekend, Bloomberg reported. The push for reinvestment involves heavy backers like Microsoft and leading venture capital firms.

Over 95% of OpenAI's employees have signed a letter asking the board to resign, reinstate Altman and leave OpenAI. As co-owners, they may also have financial motives to support Altman. On Monday came the news that Altman is going to Microsoft, presumably he will bring with him several employees who want to go with him or be reinstated.

On Monday before the market opened, Microsoft CEO Satya Nadella tweeted:
We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners. We look forward to getting to know Emmett Shear and OAI's new leadership team and working with them. And we're extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team. We look forward to moving quickly to provide them with the resources needed for their success.

Who sits on their board of directors?

The board of directors of OpenAI, Inc. serves as the overall governing body of the company. OpenAI's board consists of:

  • Ilya Sutskever OpenAI's CTO who also co-founded the company and heavy on AI development with projects as creator of the first modern neural network together with Hinton and Alex. He is also the lead author of the first generative pretrained transformer
  • Adam D'Angelo Quora CEO and Independent Board Member at OpenAI.
  • Tasha McCauley Technology entrepreneur and independent board member at OpenAI.
  • Helen Toner Director of Strategy and Head of Basic Research Grants at Georgetown's Center for Security and Emerging Technology (CSET) and independent board member at OpenAI.

OpenAI's board contacted Dario Amodei, CEO of Anthropic (OpenAI's main competitor), to discuss a potential merger after Altman was fired.

According to Greg Brockman, the new board will consist of Bret Taylor (President),
Larry Summers and Adam D'Angelo. This means that several of those responsible for safe AI, i.e. Illya Sutskever, Helen Toner and Tasha McCauley may leave the board.

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