An eventful weekend unfolded at OpenAI’s San Francisco headquarters. In an unexpected turn on Friday, the company’s board of directors ousted co-founder and CEO Sam Altman, triggering an institutional crisis. This led to the resignation of senior staff members in protest, while nearly 700 rank-and-file employees are considering the same course of action. Despite Microsoft swiftly hiring Altman for its AI projects, the board now faces calls for its own resignation. Stay informed about this situation to be prepared for Thanksgiving discussions on Thursday.
How it started
Thursday, November 16
This unfolding saga commenced what feels like ages ago in the realm of internet timelines, or more accurately, just last Thursday. According to a tweet from former company president Greg Brockman, it was during this period that OpenAI’s head researcher and board member, Ilya Sutskever, reached out to Altman to schedule a meeting for the following day at noon. In the same tweet chain, posted on Friday night, Brockman accused the company of notifying the first interim CEO, OpenAI CTO Mira Murati, about the impending terminations during that timeframe:
– Last night, Sam got a text from Ilya asking to talk at noon Friday. Sam joined a Google Meet and the whole board, except Greg, was there. Ilya told Sam he was being fired and that the news was going out very soon.
– At 12:19PM, Greg got a text from Ilya asking for a quick call. At 12:23PM, Ilya sent a Google Meet link. Greg was told that he was being removed from the board (but was vital to the company and would retain his role) and that Sam had been fired. Around the same time, OpenAI published a blog post.
– As far as we know, the management team was made aware of this shortly after, other than Mira who found out the night prior.
Friday, November 17
The entire sequence of events unfolded during the Friday noon meeting. Brockman received news of his demotion, being removed from the board while retaining the role of company president, reporting to Murati once she assumed the position. Allegedly, Altman was informed of his termination barely ten minutes later, coinciding with the public announcement. Following this, Sutskever sent out a company-wide email acknowledging that “Change can be scary,” as reported by The Information.
Later in the afternoon, the OpenAI board, accompanied by the new CEO Murati, addressed a “shocked” workforce in an all-hands meeting. During this gathering, Sutskever purportedly conveyed to employees that these actions were intended to ultimately “make us feel closer.”
At this juncture, Microsoft, which had previously invested a substantial $10 billion in OpenAI in January as part of a comprehensive, multi-year deal, provided its perspective on the day’s unfolding events. CEO Satya Nadella issued the following statement:
As you saw at Microsoft Ignite this week, we’re continuing to rapidly innovate for this era of AI, with over 100 announcements across the full tech stack from AI systems, models and tools in Azure, to Copilot. Most importantly, we’re committed to delivering all of this to our customers while building for the future. We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and an exciting product roadmap; and remain committed to our partnership, and to Mira and the team. Together, we will continue to deliver the meaningful benefits of this technology to the world.
Come Friday evening, the situation took a more dramatic turn. Brockman declared on Twitter that he resigned in protest. Following suit, Director of Research Jakub Pachocki and Head of Preparedness Aleksander Madry also announced their resignations in solidarity.
How it’s going
Saturday/Sunday, November 18/19
On Saturday, November 18, the process of backtracking commenced. Altman’s termination notice on Friday cited a lack of consistent candor in his communications with the board, hindering its ability to fulfill its responsibilities, and expressed the board’s loss of confidence in his leadership.
The subsequent morning, OpenAI COO Brad Lightcap, in internal communications obtained by Axios, conveyed that the management team was taken by surprise, engaging in conversations with the board to gain better insights into the decision-making process. Lightcap assured that the board’s decision was unrelated to malfeasance or any financial, business, safety, or security/privacy concerns. He acknowledged a breakdown in communication between Sam and the board, expressing a commitment to resolving the situation and providing updates.
A midmorning report from The Information on Saturday indicated that OpenAI’s anticipated share sale, led by Thrive Capital and valued at $86 billion, was at risk following Altman’s firing. Even if the sale proceeds, it is likely to be at a lower valuation. The value of OpenAI shares has tripled since the beginning of the year and quadrupled since 2021, putting current and former employees, many of whom were offered stock as part of hiring incentives, at risk of missing out on a substantial payout.
On Saturday afternoon, Altman announced on Twitter his intention to establish a new AI startup with Brockman’s assistance, potentially focusing on AI chips to challenge NVIDIA’s dominance in the sector. Concerned investors, fearing a potential loss of their investments, began pressuring the board of directors to reinstate Altman and Brockman.
We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners. We look forward to getting to know Emmett…
— Satya Nadella (@satyanadella) November 20, 2023
Satya Nadella of Microsoft reportedly spearheaded the effort to reverse the decision. According to Bloomberg’s sources, Nadella was “furious” about Altman’s ousting, especially considering the minimal notice he received—just “a few minutes” before the public announcement. Nadella took proactive steps, recruiting Altman and his associates for Microsoft’s own AI endeavors.
Microsoft’s influence extends to its significant investment, primarily in the form of cloud compute credits crucial for the GPT platform’s operation, rather than traditional currency. Withholding these credits could significantly impede OpenAI’s operations.
Mira Murati’s brief 48-hour stint as interim CEO concluded on Sunday when the board appointed Emmett Shear, co-founder of Twitch, as the new interim CEO. According to reports, Murati had intended to rehire Altman and Brockman as a strategic move to prompt action from the board. However, met with silence, the board autonomously selected Emmett Shear. Altman, spending Sunday at OpenAI HQ, shared an image holding a green “Guest” badge, commenting, “First and last time I ever wear one of these.”
Monday, November 20
Monday morning saw the circulation of an open letter endorsed by over 500 OpenAI employees, expressing their intention to resign and join the new Microsoft subsidiary. The ultimatum presented in the letter demanded the resignation of the entire board and the reinstatement of Altman and Brockman, along with the presumed inclusion of the other two individuals. The number of employees endorsing the letter has now surpassed 700.
— Kara Swisher (@karaswisher) November 20, 2023
However, it appears that this scenario is unlikely to unfold, despite Sutskever’s early morning admission of fault. The board has already missed the deadline to respond to the open letter, Microsoft has successfully recruited both Altman and Brockman, and Shear has already been appointed interim CEO.
Shear, who relinquished his role as CEO of Twitch in March after leading the company for over 16 years, has been serving as a partner at Y Combinator for the past seven months. Amazon acquired the live video streaming app in 2014 for just under $1 billion.
In a statement to OpenAI employees on Monday, Shear expressed his belief in the company’s significance and emphasized that he accepted the role after careful consideration, feeling a duty to contribute.
However, Shear acknowledged the mishandling of Altman’s termination, stating that it seriously damaged trust. Consequently, he announced the hiring of an independent investigator to examine the events leading up to Friday’s situation.
Shear clarified that Altman was not removed over any safety-related disagreement, and the board’s reasoning was entirely different. He reassured the company’s commitment to commercializing their models, emphasizing the need for board support.
After Altman’s departure to Microsoft on Monday, he expressed pride in the OpenAI leadership team, particularly mentioning Mira, Brad, and Jason, stating that they have done an incredible job through the challenging situation.