ChatGPT creator OpenAI dominated the news space last week owing to the corporate drama at the company, which started with the OpenAI board firing the CEO Sam Altman on Friday. Although the company on Wednesday announced the reinstatement of Altman as the CEO, a lot happened over the weekend. Let’s take a look at the entire episode and subsequent developments.
OpenAI announced the removal of company CEO Sam Altman in a blog post. It said that the decision to fire Altman followed a deliberative review process by the company board, which concluded that he was not consistently candid in his communications with the board. The post added that the OpenAI board no longer had confidence in Altman’s ability to continue leading the company.
The post also confirmed that OpenAI co-founder and president Greg Brockman would also be stepping down as chair of the board but remain at the company. However, Brockman soon posted on X that he had decided to resign from Open.
A Reuters report said that Sam Altman’s removal as company CEO followed an AI breakthrough that could threaten humanity. As per the report, several staff researchers at OpenAI warned the board of directors about project Q*, a possible breakthrough in the company’s search for artificial general intelligence (AGI), which it defines as an autonomous system that surpasses humans in most economically valuable tasks.
Following the exit of Altman and Brockman from OpenAI, several OpenAI employees quit the company with hundreds of others threatening to leave OpenAI if Altman wasn’t brought back. It was reported that company investors were considering suing the board. Amidst all this, Microsoft CEO Satya Nadella swooped in to announce that the software major was hiring Sam Altman, Greg Brockman, and colleagues to lead a new advanced AI research team at Microsoft. Altman acknowledged Nadella’s announcement.
Meanwhile, Microsoft CTO Kevin Scott offered to match the compensation of OpenAI employees who left the company after Altman’s surprise ouster. It isn’t clear what will happen to the staff that resigned in support of the two executives. Notably, other tech giants have also floated job offers for the OpenAI employees who quit recently. Even before this drama, a lot of OpenAI researchers jumped ship to join the competition, including Anthropic and Elon Musk’s xAI.
The OpenAI crisis has been termed as the result of a clash between caution and innovation, where the board underestimated the influence of Microsoft- a significant investor and long-term partner for OpenAI. The crisis was also brought upon by the unusual structure of the company. Unlike the big tech, the ChatGPT-maker was set up as a non-profit by the founders, but it was later transitioned to a for-profit model.
Since the controlling shareholder was the non-profit OpenAI Inc and its board of directors, it was possible for four OpenAI board members to oust CEO Sam Altman. The return of Sam Altman as OpenAI CEO and Greg Brockman as company president tags along a new board which enjoys the support of Microsoft.
The return of Altman and Brockman at OpenAI could be more beneficial to Microsoft compared to the executives joining the software major. Microsoft CEO Satya Nadella had previously called for changes in the governance of OpenAI, irrespective of whether Altman returned to the company or not. The new board is exactly what Microsoft wanted and now it has seemingly closer ties with both OpenAI CEO and OpenAI President.
