It is a corporate soap opera of unprecedented proportions. Investors tried for a weekend to have Sam Altman return as CEO of OpenAI, the company that developed the advanced text generator ChatGPT, among other things.
That failed, but this morning the story took a new twist: Altman is switching to Microsoft. He brings with him confidant Greg Brockman, president of OpenAI until Friday.
Shock in the tech world
Altman’s resignation sent shockwaves among OpenAI employees, investors and the broader tech community on Friday. Until now, OpenAI has been at the forefront when it comes to AI developments.
Normally, a founder and CEO of a company is not so easily put aside. Especially if the company is extremely successful; that goes against all Silicon Valley laws.
OpenAI is just not a normal company. It was founded as a non-profit organization, with a commercial arm that is intended to make it easier to raise money. Developing AI is expensive.
The nonprofit’s board is effectively in charge, effectively leaving Altman with virtually no power. That is a big difference with, for example, Meta – the parent company of Facebook and Instagram – where founder Mark Zuckerberg has a majority vote on the board.
Reason for dismissal unclear
Despite 48 hours of negotiations, the OpenAI board, which has not yet responded to the latest developments, saw no point in Altman’s return last weekend. Mira Murati (technical director at the company) has also been set aside as interim boss. The board has now appointed the co-founder of livestream platform Twitch as the new chairman.
Altman’s final departure plunges the company into further chaos. Altman was loved by employees. Tech news site The Information reports that dozens of employees have now announced their departure. They will find a new job with great ease, with or without Altman’s new employer Microsoft.
Battle of directions
Initially, there were reports that Altman was considering starting his own startup. Bloomberg reported also that he was working on a startup that has to compete with chip maker Nvidia; Altman wanted to raise a billion-dollar investment in the Middle East.
It is currently unclear whether his plans outside OpenAI played a role in the decision to suddenly dismiss him.
In any case, it seems that there was an internal battle of directions going on. One of OpenAI’s other founders and board member, Ilya Sutskever, was volgens The New York Times increasingly concerned that the technology the company was developing could be dangerous and that Altman was not paying enough attention to this.
According to the new CEO a disagreement about safety was not the reason for dismissal. He did not say what the reason was.
Uncertain future of OpenAI
Altman was asked around noon on Friday in San Francisco to participate in a video call, in which Sutskever allegedly read a text to the effect that he had been fired.
OpenAI’s main partner and investor, Microsoft, was informed a minute before the release of the press release. That was anything but good for the tech giant.
The software giant has invested $13 billion in OpenAI, mainly in computing capacity for training AI. The company owns 49 percent of the shares in the commercial branch. However, it does not have a seat on the board and therefore has limited influence.
The big question is what will happen next with OpenAI. It is clear that the organization is in crisis. In the short term, users will not notice this much. ChatGPT will continue to work as normal.
There are definitely problems in the long term. The board has shown itself to be unpredictable. That could make it more difficult for OpenAI to acquire AI talent, raise money (they were working on that, at a valuation of 78 billion euros) or enter into important partnerships.
In a market where competition is fierce, this can seriously hinder further success.
The post first appeared on nos.nl