OpenAI Drama: Altman and Board Clash, CEO Ousted!

According to a source familiar with the situation, OpenAI’s decision to terminate Sam Altman was a result of extensive disagreements between the CEO and the board, specifically with Ilya Sutskever, a co-founder and the chief scientist of the company.

In the discussions, there were disagreements about the safety of artificial intelligence, the speed of technology development and the commercialization of the company, said the person who asked to be identified when discussing private information.

Altman’s ambition may also have played a part in the breakup. Altman has been looking to raise tens of billions of dollars from Middle East sovereign wealth funds to create an artificial intelligence chip startup that will compete with processors made by Nvidia Corp., according to a person familiar with the investment proposal. Altman was also courting SoftBank Group Corp. Chairman Masayoshi Soni for a multibillion-dollar investment in a new company to make artificial intelligence-oriented hardware in partnership with former Apple designer Jony Ive.

Sutskever and his allies on OpenAI’s board may have been dismayed by Altman’s fundraising in OpenAI’s name, and these new companies do not share the same governance model as OpenAI, according to this person.

OpenAI’s former president, Greg Brockman, said in a statement late Friday that he and Altman were surprised by the company’s decision. “Sam and I are shocked and saddened by what the government did today,” Brockman wrote in a post on X, formerly Twitter. “We’re also still trying to figure out what happened.”

Brockman said the board spoke to Altman at a Google Meet where Sutskever delivered the news: “Ilya told Sam that he was fired and that the news would be out very soon.”

In another X issue, Altman said, “I love you all.” He added: “Today was a strange experience in many ways. But one unexpected thing is that it’s kind of been like reading your own eulogy while you’re still alive. The outpouring of love is amazing.”

OpenAI’s board of directors is wrangling over security, echoing long-standing disagreements within OpenAI over the responsible development of powerful AI tools — issues that have plagued the company since its inception. Similar disagreements over security and commercialization are the reasons why Elon Musk cut ties with OpenAI in 2018 and why a group of employees left in 2020 to start rival Anthropic.

In July, Sutskever formed a new team in the company to put the “super-intelligent” artificial intelligence systems of the future under control. Before joining OpenAI, the Israeli-Canadian computer scientist worked at Google Brain and was a researcher at Stanford University.

A month ago, Sutskever’s responsibilities at the company were reduced, reflecting friction between him and Altman and Brockman. Sutskever later appealed to the board and won over some members, including Helen Toner, director of strategy at Georgetown’s Center for Security and Emerging Technologies.

Brockman resigned on Friday after Altman was fired.

Altman’s ouster was a shock to him and Brockman. In an X message, Brockman said Mira Murati, who is now the company’s interim CEO, found out Thursday night. The rest of OpenAI’s leadership learned shortly before the public announcement, Brockman said.

The news blindsided leading investors and startups across Silicon Valley and plunged tech’s most promising industry into uncertainty.

Companies firing their founders are part of Silicon Valley’s recurring basic history. Apple fired Steve Jobs in 1985; Twitter fired its founder Jack Dorsey in 2008. Both executives famously returned to their companies years later. But Altman’s departure may have a larger impact on the industry he came to represent.

In the chaotic hours after the company’s announcement Friday, investors in the venture capital firm had no idea why OpenAI’s executive had suddenly been fired, according to multiple company representatives. Even Microsoft Corp., the startup’s biggest backer, didn’t learn of Altman’s ouster until the announcement became public, according to people familiar with the matter.

The immediate reaction of the tech world was a mixture of surprise, consternation and wild speculation. Industry chatrooms erupted, with investors and tech executives exchanging theories on social media about what prompted OpenAI’s board to fire its famous CEO. Due to the company’s lack of data, the prediction betting platform Manifold Markets started betting for a reason.

As of late Friday morning, Altman was still sending regular emails to employees as CEO. He even appeared at several events on Thursday, representing OpenAI at the Asia-Pacific Economic Cooperation Summit in San Francisco and attending an evening event at the Burning Man festival where he spoke about the future of AI art.

Earlier this month, the company held its first developer conference known as DevDay, which generated excitement for its products. “I think the developer community really loves following bold visionaries, and DevDay happened, I was there, and the excitement was off the charts,” said Matt Schlicht, CEO of Octane AI. “And that was like a week ago.”

Altman had a large presence in the tech world, supporting and participating in various startups. He was also a leading ambassador for artificial intelligence, and his departure could undermine wider faith in the technology. But as with previous scandals, some predict the industry will take the news in stride.

“I don’t think it’s going to shake anyone’s confidence in the technology,” said Cory Klippsten, CEO of bitcoin financial services firm Swan. “I think it makes people look really hard at what biases and rules or protocols are in the structure of OpenAI.”