Back and forth…
OpenAI will rehire Sam Altman and restructure its board of directors, including Larry Summers, in a stunning reversal in a drama that has captivated Silicon Valley and the global AI industry.
Bret Taylor, a former co-CEO of Salesforce.com Inc. and director at Twitter before it was acquired by Elon Musk, will chair the initial board. Altman will return as CEO.
Summers, the former US Treasury Secretary under President Barack Obama, and Adam D’Angelo, the co-founder and CEO of Quora Inc., are among the other directors. OpenAI is now working to “figure out the details,” according to a post on X.
After nearly all of OpenAI’s employees threatened to leave in protest of his sudden dismissal, the company decided to reinstate its co-founder.
The post elicited immediate congratulations from key players in the saga, including former president Greg Brockman, who has announced his own return to the fold, and CTO Mira Murati.
Altman had been in talks with the company to return after being fired by OpenAI’s board on Friday due to disagreements over how quickly to develop and monetize artificial intelligence. According to people familiar with the situation, those talks came to a halt on Sunday, owing in part to pressure from Altman and others for existing board members to resign.
Instead, the board appointed a new CEO, former Twitch CEO Emmett Shear, and OpenAI’s biggest backer, Microsoft Corp., announced that Altman would lead a new in-house AI team.
Within hours, the majority of OpenAI’s 770 employees signed a letter to the board warning that unless all board directors resigned and Altman was reinstated, they would quit and join Microsoft. Murati, who was named interim CEO on Friday, and Ilya Sutskever, an OpenAI co-founder and board member who had previously disagreed with Altman on the company’s direction, were among those who signed the letter.
“I deeply regret my participation in the board’s actions,” Sutskever said in a post on X, on Monday.
“I never intended to harm OpenAI. I love everything we’ve built together and I will do everything I can to reunite the company.”
Altman’s return caps a tumultuous few days for the world’s most well-known AI startup.
Summers, a Harvard University professor and paid contributor to Bloomberg TV, serves on the boards of Block Inc. and Skillsoft Corp., both of which are owned by Jack Dorsey’s. The swift reversal may appease investors and reduce the risk of employee exodus.
However, it raises concerns about the future of ChatGPT and other AI startups, which have attempted to balance responsible AI development with the need to raise large sums of capital from investors to support the expensive computing infrastructure required to build these tools.OpenAI was founded in 2015 as a nonprofit with the goal of advancing AI in a way that benefits humanity rather than financial gain.
The group later reorganized as a capped for-profit entity, raising billions from Microsoft and other investors, with Altman playing a key role in those transactions, but it was still overseen by a non-profit board. This tension has recently exploded into the open.
Altman’s departure caught the startup’s investors off guard. Microsoft, which invested more than $10 billion in the startup, was given only a few minutes notice of Altman’s dismissal.
According to people familiar with the matter who asked to remain anonymous because they were discussing private information, the software giant began working with investors such as Thrive Capital and Tiger Global Management to bring him back.
After that effort failed, Microsoft agreed to hire Altman and other OpenAI employees. OpenAI also faced new uncertainty over plans to allow employees to sell their shares for $86 billion.
According to sources, Thrive, which was expected to lead a tender offer for employee stock, had not yet wired the money as of Saturday and had informed OpenAI that Altman’s departure would have an impact on its actions.
Altman, 38, has emerged as the face of a new era of artificial intelligence technology, thanks to the viral success of ChatGPT.This year, Altman was at the forefront of the industry’s efforts to collaborate with regulators, and he met with world leaders on a regular basis, including US President Joe Biden and UK Prime Minister Rishi Sunak.
On Thursday, he spoke on a panel at the Asia-Pacific Economic Cooperation conference, which was attended by other executives and world leaders, about the future of artificial intelligence and its risks. Behind the scenes, however, Altman clashed with members of his board, particularly Sutskever, over how quickly to develop generative AI, how to commercialize products, and the steps required to mitigate potential public harms, according to people familiar with the situation.
D’Angelo, Tasha McCauley, CEO of GeoSim Systems, and Helen Toner, director of strategy and foundational research grants at Georgetown’s Center for Security and Emerging Technology, were also on OpenAI’s board at the time.
Along with disagreements over strategy, board members clashed over Altman’s entrepreneurial ambitions. According to a person familiar with the investment proposal, he has been looking to raise tens of billions of dollars from Middle Eastern sovereign wealth funds to launch an AI chip startup to compete with Nvidia Corp. processors. Altman was courting SoftBank Group Corp. chairman Masayoshi Son for a multibillion-dollar investment in a new company that would produce AI-oriented hardware in collaboration with former Apple designer Jony Ive.
Altman’s side projects complicated an already strained relationship with the board. OpenAI said in a statement Friday that Altman’s departure came after an internal board review found the CEO “was not consistently candid in his communications with the board, hampered its ability to exercise its responsibilities.”
As a result, it declared, Altman’s side projects complicated an already strained relationship with the board. OpenAI said in a statement Friday that Altman’s departure came after an internal board review found the CEO “was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.”
As a result, it declared, “the board no longer has confidence in his ability to continue leading OpenAI.” The boardroom drama had echoes of other Silicon Valley coups. Steve Jobs, co-founder of Apple, was fired as CEO in 1985, only to return more than a decade later. Dorsey, a co-founder of Twitter, was fired in 2008 and returned as CEO seven years later.