From compute to chaos: OpenAI faces upheaval following Sam Altman’s dismissal

• Sam Altman was ousted as OpenAI CEO after boardmembers went against him, leading the rest of the company to call for their dismissal.
• Microsoft, OpenAI’s main investor, prevents Altman from taking his tech expertise elsewhere. 
• Altman and co-founder Greg Brockman will lead a new AI research team at Microsoft, and signs suggest they might bring along some of OpenAI’s top talent.

In the wake of the November 2022 debut of ChatGPT, the Silicon Valley startup OpenAI has had an extraordinary ascent. The unparalleled success of its AI chatbot has triggered a frenzy in the AI sector over the past year. However, as ChatGPT nears its one-year milestone, OpenAI is facing internal turmoil, highlighted by the abrupt removal of CEO Sam Altman just a few days ago.

Sam Altman’s unexpected dismissal as the chief executive of OpenAI on November 17, 2023 sent shockwaves through the industry. Altman has served as the human face of the generative AI revolution, even liaising with world leaders. Just a day before the ‘boardroom coup,’ the co-founder and leader of OpenAI was advocating the benefits of AI to executives and global leaders at the Asia-Pacific Economic Cooperation summit in San Francisco.

The following day, he was dismissed abruptly. The board has been tight-lipped about the reasons for his departure. However, a blog post on OpenAI’s website stated that the board “no longer has confidence” in Altman’s leadership because “he was not consistently candid in his communications with the board.” 

The unexpected removal was even more astonishing, considering Altman had appeared to be at the pinnacle of his influence. Having recently concluded a world tour, Altman had met with leaders in various countries, having closed-door and open discussions on AI. But it wasn’t long after Altman’s surprise removal that Greg Brockman, the chairman of the board and another co-founder, resigned in response to the former’s termination.

After learning today’s news, this is the message I sent to the OpenAI team: https://t.co/NMnG16yFmm pic.twitter.com/8x39P0ejOM

— Greg Brockman (@gdb) November 18, 2023

What happened after Friday’s announcement?

When Brockman announced he would be leaving the company, he also detailed how co-founder Ilya Sutskever and other boardmembers notified Altman of the decision over a Google Meet call shortly before the announcement went public. The following day, amid the boardroom tussle in OpenAI, three senior researchers resigned in response to Altman’s departure, as reported by The Information.

Disregarding these concerns, the board appointed Emmett Shear, the former CEO of Twitch, on Sunday. All the decisions made by the board since Friday were independent of their investors, leaving Satya Nadella, Microsoft’s CEO, unaware. It’s worth noting that Microsoft is the largest investor, with a substantial US$13 billion investment in OpenAI.

Despite setting a 5pm PT deadline on Saturday for the board to reinstate Altman and Brockman, which the remaining boardmembers ultimately missed, employees took to social media, emphasizing that “OpenAI is nothing without its people.” By Monday morning, OpenAI employees overwhelmingly supported Altman, with many indicating their intention to leave the company in a widespread exodus. 

Who’s firing who at OpenAI?

In a letter addressed to the board, employees expressed that the directors had “compromised our mission and the integrity of our company” by terminating Altman and causing his co-founder Brockman to quit on Friday. According to an individual with direct knowledge of the matter, as of 6pm local time on Monday, November 20, 747 out of 770 employees had urged the board to resign. 

In the open letter to the board, Sutskever’s name too appeared, indicating that he had flipped on the boardmembers. This is even though he had played a key role in the ousting of Altman just days earlier. 

“I deeply regret my participation in the board’s actions,” Sutskever said in a post on X, formally Twitter. “I never meant to harm OpenAI.” Another signatory was top executive Mira Murati, who was appointed to replace Altman as CEO when he was removed on Friday, but was herself cast aside for the job over the weekend.

At the same time, the newly appointed CEO, Shear, has been facing challenges obtaining written documentation outlining the board’s specific rationale for Altman’s dismissal. The information has not been disclosed to the company’s investors either, as reported by various media, quoting sources familiar with the matter. Shear stated in a note to employees on Sunday night that his top priority is to “engage an independent investigator to thoroughly examine the entire process leading up to this point and produce a comprehensive report.”

What does OpenAI have against former CEO Sam Altman?

Before the events of last week, OpenAI was reportedly engaged in discussions to finalize a fundraising deal, potentially valuing the business at US $80 billion.

Altman was closely associated with the triumph of ChatGPT, which garnered 100 million users within two months of its launch on November 30, 2022.

Altman serves not only as the company’s CEO, but also as the symbol of an AI revolution that has captivated the public and investors, while raising concerns among industry insiders and experts. 

The board gave no further details about the communications in question besides emphasizing the “lack of candidness in his communications with the board,” which was thus “hindering its ability to exercise its responsibilities.” 

Nevertheless, Altman, during OpenAI’s inaugural developer conference earlier this month, unveiled a strategy to establish an app store for AI agents. Additionally, according to Bloomberg, Altman was seeking investment from Middle East sovereign wealth funds for the production of AI chips intended to rival those of Nvidia. 

Previous reports from The Information also suggested Altman was exploring the prospect of collaborating with ex-Apple designer Jony Ive on developing AI-focused hardware, potentially funded by Softbank.

Microsoft to the rescue

The biggest investor in OpenAI, Microsoft, has chosen to avoid risking Altman applying his tech expertise elsewhere. On Monday, OpenAI’s former CEO announced he would join the Seattle-based tech giant to lead an as-yet-unformed AI research team. 

Nadella wrote on X that Altman would lead “a new advanced AI research team.” OpenAI’s former co-founder, Brockman, will accompany Altman, and based on the number of staff members posting on X on Monday, he will be bringing some of OpenAI’s top talent with him as well.

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…

— Satya Nadella (@satyanadella) November 20, 2023

Apparently, there are jobs for all OpenAI staff if they want to join Microsoft. In an interview with CNBC, Nadella said he was open to working with OpenAI or working with OpenAI employees who come to Microsoft. “At this point… it’s very clear that something has to change around the governance [at OpenAI],” he added, saying the firms would be in dialogue about this.

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