Altman Returns to OpenAI – But Why Was He Fired?

Less than five days after being unexpectedly dismissed, Sam Altman is making a comeback to lead OpenAI. This sudden turn of events has sparked a battle for his talent, causing turmoil within the company and exposing significant disagreements among the board members regarding the startup’s mission, despite its immense value.

OpenAI’s new interim board, of which Altman was not originally a member, will be led by Bret Taylor, the former CEO of Salesforce Inc. Other directors include Larry Summers, former US Treasury Secretary, and current member Adam D’. Angelo, Founder and CEO of Quora Inc.

Altman was fired on Friday after falling out with the board over his efforts to transform OpenAI from a nonprofit organization focused on the scientific study of artificial intelligence into a company that builds products, attracts customers and arranges the funding needed to deploy AI tools. Members of the former board were concerned about the potential harms of powerful, unsupervised artificial intelligence.

The task of the interim board is to find new leaders who can strike a better balance between OpenAI’s business needs and the need to protect the public from tools that can create content that misinforms, increases inequality, or facilitates violence by bad actors.

The reconstituted board should reflect greater diversity, said multiple people, including Ashley Mayer, CEO of venture capital firm Coalition Operators. “I’m excited for the OpenAI folks that Sam is back, but it feels good in 2023 that our happy ending is three white men on a mission to make sure AI benefits all of humanity,” he wrote on social media site X. “Hopefully more is coming soon.”

Investors also expect changes in the way the government communicates with stakeholders. Executives at Microsoft Corp., which has said it will invest up to $13 billion in OpenAI, were furious after being told only briefly about the board’s plans to fire Altman, people with knowledge of the matter have said.

A person close to the negotiations said several women were proposed as possible interim directors, but the two sides could not reach an agreement. Both Laurene Powell Jobs, the billionaire philanthropist and widow of Steve Jobs, and former Yahoo CEO Marissa Mayer were brought in but were deemed too close to Altman, this person said. Former Secretary of State Condoleezza Rice was also considered, but her name was rejected as well. Ultimately, there will be women on the board, this person said.

Some OpenAI investors and executives have also complained that the board has not adequately explained its reasoning for firing Altman. Board members said Altman was not “consistently forthright in his communications.”

Since then, board members and employees have said the CEO’s firing was not related to “misconduct” or “security,” leaving an information vacuum. Microsoft CEO Satya Nadella said publicly that he had not been given an explanation.

Emmett Shear, who was named interim CEO by the board on Sunday, told people close to OpenAI that he didn’t plan to stay on if the board couldn’t give him a clear, written rationale for Altman’s sudden firing. people who know about it.

Microsoft, whose AI strategy hinges on the startup’s technology, is likely to be represented on the new board, either as an observer or possibly in one or more seats, according to one person with knowledge of the matter. Although Altman initially agreed not to take a seat on the board to get the deal done, he is likely to join the board eventually, the second person said.

Altman also agreed to an internal investigation into the conduct that led to his termination, the second person said. Previous OpenAI board members include D’Angelo, OpenAI founder and principal scientist Ilya Sutskever, Tasha McCauley of GeoSim Systems, and Helen Toner, director of Georgetown University’s Center for Security and Emerging Technologies.

Other investors outside of Microsoft were outraged by the government’s move. Vinod Khosla of Khosla Ventures was present. “I have not spoken to the board members who were involved” in the decision to fire Altman, Khosla said Wednesday in an interview with Bloomberg Technology. “I think that’s their misbehavior.”

McCauley and Toner have declined to comment on the shooting and its aftermath. Altman also declined to comment.

Sutskever — known in the field of artificial intelligence and dating back to his research at the University of Toronto — later apologized for his role in Altman’s firing, going so far as to sign a letter threatening to leave OpenAI unless the board resigned.

The pioneering research that Sutskever participated in has helped usher in the modern era of artificial intelligence. A lawyer for Sutskever said the executive is “thrilled to have Sam back as CEO” and said he remains with the company.

“I admire Ilya a lot” when he changed his mind, Khosla said. He “absolutely” deserves a second chance, he added.

One of OpenAI’s big questions is to what extent Altman can continue to do outside projects. Months before he was booted from the company, he traveled the world to raise billions of dollars from some of the world’s biggest investors for a new chip venture, codenamed Tigris, people familiar with the matter said.

The idea was to create an AI-focused chip company that could produce semiconductors to compete with Nvidia Corp., which currently dominates the AI processor market, these people said.

Altman has also sought to raise money for hardware focused on artificial intelligence, which he co-developed with former Apple Inc. design chief Jony Ive.

These side projects are another matter for the board to consider as he settles back into the CEO role.

“Sam has broad interests and broad investments,” Nadella said.