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Sam Altman has been abruptly ousted from OpenAI’s board, sending shock waves through the tech industry and raising questions over the company’s direction amid fears of an internal rift among senior management.
The 37-year-old reportedly received a message from a fellow board member yesterday inviting him to a surprise Google Meet video call, after which Altman learned he was fired.
“Today was a strange experience in many ways,” a shocked Altman later posted on Twitter. ‘Ctrl, Altman, Delete’, as one JPMorgan analyst succinctly wrote in a note on the entrepreneur’s departure.
Altman was at the helm of the world’s most famous AI business. He led OpenAI through a period of surprisingly rapid growth, including its AI-powered chatbot, ChatGPT, hitting 100 million regular users within weeks of its launch, tech giant Microsoft injecting $10 billion in funding, And the firm allegedly influenced the valuation. Up to 90 billion dollars. There was so much publicity surrounding ChatGPT that OpenAI soon ran out of server capacity and was forced to turn away customers.
The success propelled Altman to stardom as the tech boss became the face of generative AI, joining the ranks of Elon Musk, Bill Gates and Mark Zuckerberg and becoming a celebrity entrepreneur in his own right. He toured the world with bold proclamations about the future of AI, appearing before lawmakers in the US Congress and rubbing shoulders with Prime Minister Rishi Sunak at the UK’s AI Security Summit as media outlets latched onto his every comment. Emphasized on. But Altman now finds himself out of the firm he was deeply involved with for more than eight years.
So why was Sam Altman fired from OpenAI?
Sam Altman, former CEO of OpenAI (AP)
OpenAI didn’t offer much in its explanation. In a statement released late Friday, the San Francisco-based business said it had “concluded that he was not consistently clear in his communications with the board, which was hindering his ability to carry out his responsibilities.”
“The board no longer has confidence in her ability to continue leading OpenAI,” the company said, adding that Mira Muratti, chief technology officer, will remain as interim CEO until a permanent replacement is found. No evidence was presented that board members believed Altman was not ‘candid’ with them.
The board’s announcement surprised major investor Microsoft as well as senior members of Open AI, including its co-founder and chairman Greg Brockman, who resigned shortly after hearing the news. Three senior researchers, Jakub Pachocki, Alexander Madry and Szymon Sidor, also resigned in retaliation for the move, The Information reported.
“Sam and I are shocked and saddened by what the board did today,” Brockman wrote on X. We are also still trying to find out what exactly happened.
Tech investors became nervous about the sudden board shakeup. “Nobody has a clue” why this happened, Seb Wallace, a VC investor at London-based Triple Point, told the Standard. “Really everyone is shocked.”
Others put it in even stronger terms. Veteran Silicon Valley venture capitalist Ron Conway wrote: “What happened at OpenAI is a board coup the likes of which we have not seen since 1985 when the then-Apple board ousted Steve Jobs.
“This is shocking; This is irresponsible; And it’s not done right by Sam.”
Some believe that tensions over the company’s stance towards profit making were responsible for the apparent rift at senior levels in the company. OpenAI was founded as a nonprofit, but early investor Elon Musk said in February that it had become a “closed source, profit-maximizing company…not what I intended.”
In a message seen by the Standard, moments after Altman’s exit, OpenAI contacted its business customers to tell them it was changing its billing rules, such as giving companies credit for using its API service. Advance payments will have to be made for the firm, a move that will likely increase the firm’s cash flow.
“The board fired the CEO and 1 hour later, thousands of customers got an email saying you now have to pre-pay,” said James Wise, partner at London-based venture capital firm Balderton.
“It doesn’t take a super detective to figure out what happened.”
There have also been reports of internal division over the company’s AI security policies, with some raising concerns over security considerations. According to the Wall Street Journal, OpenAI’s chief scientist and co-founder Ilya Sutskever was “concerned about the long-term security” of OpenAI’s products and was eager for greater alignment with humanitarian values. But at a company meeting after Altman’s departure, Sutskever refused to tell employees why its CEO had left the company.
Others point to the fact that Sam Altman has something of a history when it comes to sudden departures from company boards.
While Altman was on the board of the online discussion forum Reddit, CEO Yishan Wong resigned over what Altman described as “a disagreement with the board about the new office.” Altman stepped down as CEO, but only eight days before a replacement was found.
The tech entrepreneur was also appointed chairman of San Francisco-based tech start-up investor Y Combinator in 2011, and became chairman of its parent company, YC Group, in 2016. But by 2019 he was removed as chairman, and by 2020, he said he would leave the board and remain as an advisor – a role he never formally assumed.
Former Bloomberg journalist Eric Newcomer wrote: “Altman went from president to chairman, to advisor, to having no connection to Y Combinator without much detailed reporting from the press. “YC successfully suppressed what appears to be a real divide.”
What recourse does Altman have after his removal from the board? The answer might be: very little. While a board member of OpenAI since its founding in 2015, he made a point of not owning any shares in the company, a move he argued kept his focus on AI safety rather than profit making .
As the entrepreneur quipped today: “If I start going out, the OpenAI board should come after me for the full value of my shares.”