Business Maverick

Business Maverick

Altman is back at OpenAI, but questions remain as to why he was fired in first place

Altman is back at OpenAI, but questions remain as to why he was fired in first place
Sam Altman. (Photo: SeongJoon Cho/Bloomberg)

Sam Altman is returning to lead OpenAI less than five days after his surprise dismissal, which kicked off a tug of war for his talent, left the company in disarray and laid bare deep board divisions over the mission of one of the world’s most valuable startups.

OpenAI’s new interim board, which won’t include Altman at the outset, will be led by Bret Taylor, a former co-CEO of Salesforce Inc. The other directors are Larry Summers, the former US treasury secretary, and existing member Adam D’Angelo, the co-founder and CEO of Quora Inc.

Altman had been fired on Friday after clashing with the board over his drive to transform OpenAI from a nonprofit organisation focused on the scientific exploration of artificial intelligence into a business that builds products, attracts customers and lines up the funding needed to power AI tools. Members of the former board harboured concerns about the potential harms done by powerful, unchecked AI.

Job one for the interim board will be finding new directors who can strike a better balance between OpenAI’s business imperatives and the need to protect the public from tools capable of creating content that misinforms, worsens inequality or makes it easier for bad actors to inflict violence.

The reconstituted board should reflect greater diversity, said many people, including Ashley Mayer, CEO of Coalition Operators, a venture capital firm. “I’m thrilled for OpenAI employees that Sam is back, but it feels very 2023 that our happy ending is three white men on a board charged with ensuring AI benefits all of humanity,” she wrote on the social media site X. “Hoping there’s more to come soon.”

A person close to the negotiations said that several women were suggested as possible interim directors, but parties couldn’t come to a consensus. Both Laurene Powell Jobs, the billionaire philanthropist and widow of Steve Jobs, and former Yahoo CEO Marissa Mayer were floated, but deemed to be too close to Altman, this person said. 

Former Secretary of State Condoleezza Rice was also considered, but her name was dismissed as well. Ultimately, the board will include women, this person said.

Investors will also expect changes in the ways the board communicates with stakeholders. Executives at Microsoft, which has said it will invest as much as $13-billion in OpenAI, were outraged after being given only a brief heads-up about the board’s plans to fire Altman, people with knowledge of the matter have said.

Some investors and executives at OpenAI have also complained that the board hasn’t sufficiently explained its rationale for dismissing Altman. Board members said Altman wasn’t “consistently candid in his communications”.

In the days since, board members and staff have said that the CEO’s removal was unrelated to “malfeasance” or “safety”, leaving an information vacuum. Microsoft CEO Satya Nadella said publicly that he hasn’t 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 in the role if the board couldn’t clearly communicate to him in writing its reasoning for Altman’s sudden firing, according to people with knowledge of the matter.

Microsoft, whose AI strategy hinges on the startup’s technology, will likely have representation on the new board, whether as an observer or, possibly, with one or more seats, according to one person with knowledge of the matter. Although Altman agreed not to take a board seat initially in order to get the deal done, he too will probably join the board eventually, another person said.

Altman also agreed to an internal investigation into the conduct that led to his dismissal, another person said. OpenAI’s earlier board members included D’Angelo, OpenAI co-founder and chief scientist Ilya Sutskever, Tasha McCauley of GeoSim Systems, and Helen Toner, director at Georgetown University’s Center for Security and Emerging Technology.

OpenAI investor Vinod Khosla said the board’s firing of Sam Altman was “errant behaviour on their part”.

Other investors beyond Microsoft were incensed by the board’s move. That included Vinod Khosla of Khosla Ventures. “I have not talked to the board members who participated” in the decision to fire Altman, Khosla said on Wednesday in an interview with Bloomberg Technology. “I think it’s errant behaviour on their part.”

McCauley and Toner have declined to comment on the firing and its fallout. Altman also declined to comment.

Sutskever — who is renowned in the field of AI, dating back to his research at the University of Toronto — later apologised for his role in the dismissal of Altman and went so far as to sign a letter threatening to leave OpenAI unless the board resigned.

Groundbreaking research to which Sutskever contributed is credited with helping usher in the modern AI age. A lawyer for Sutskever said the executive is “thrilled that Sam is back as CEO” and said he is still employed at the company.

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

One of the big questions for OpenAI is to what extent Altman can continue pursuing outside ventures. In the months before he was booted from the company, he was travelling the globe to raise billions of dollars from some of the world’s largest investors for a new chip venture, codenamed Tigris, people with knowledge of the matter have said.

The idea was to spin up an AI-focused chip company that could produce semiconductors to compete against those from Nvidia Corp., which currently dominates the market for artificial intelligence processors, these people said.

Altman has also been looking to raise money for an AI-focused hardware device that he’s been developing in tandem with former Apple Inc. design chief Jony Ive.

Those side projects will be another issue the board will have to consider as he settles back into the CEO role.

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


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