Altman steps down as OpenAI’s CEO, surprising decision for the company

Altman steps down as OpenAI’s CEO, surprising decision for the company

OpenAI’s recent turmoil continues as former Y Combinator president, Sam Altman, will not be returning as CEO, according to a report by The Information. Altman was fired on Friday, leading investors and some employees to urge the company’s board to rehire him. However, Altman has decided to walk away from negotiations for now, as stated in an internal memo by board director and co-founder, Ilya Sutskever. In the meantime, OpenAI has appointed Emmett Shear, co-founder of Twitch, as interim CEO, replacing Mira Murati, who held the position for only two days.

The firing of Altman and the subsequent demotion of OpenAI president and co-founder Greg Brockman reportedly infuriated Satya Nadella, the CEO of Microsoft, a major backer and partner of OpenAI. Nadella had been mediating between Altman and the board and had pledged to support Altman regardless of the outcome. OpenAI investors, including Tiger Global, Sequoia Capital, and Thrive Capital, sought Microsoft’s help in pressuring the board to reinstate Altman and Brockman, even considering legal action against the board members.

Following Altman’s dismissal, several senior OpenAI researchers, including the director of research Jakub Pachocki and head of preparedness Aleksander Madry, left the company. Others threatened to resign if Altman and Brockman were not reinstated.

The root cause of the chaos seems to be a clash of philosophies. Sutskever expressed during an all-hands meeting that he believed removing Altman was necessary to protect OpenAI’s mission of making AI beneficial to humanity. Reports confirmed that Sutskever was upset by announcements made at OpenAI’s DevDay conference, including the mention of custom GPTs that could potentially operate autonomously.

Altman reportedly demanded significant managerial changes and a new board of directors as a condition of his return. He criticized the lack of influence major shareholders had in OpenAI’s governance. Bret Taylor, co-CEO of Salesforce, was being considered for the new board, along with a Microsoft-aligned member or board observer.

Microsoft is reportedly displeased with the outcome, which is not surprising considering the instability at OpenAI. The company’s shares dropped 1.7% on Friday, resulting in a market value loss of nearly $47 billion.

OpenAI’s search for a new permanent CEO continues, while the company faces pressure from different angles to reconsider its decisions regarding Altman and Brockman.