Investors’ Fury: OpenAI’s Board Proves Inadequate

Investors’ Fury: OpenAI’s Board Proves Inadequate

OpenAI Board Faces Backlash Over CEO Removal

The board of OpenAI, the AI startup known for its popular AI-powered projects like ChatGPT, made a surprising move on Friday by removing the company’s CEO, Sam Altman. However, it appears that the board underestimated the backlash that would follow their decision. OpenAI’s investors, partners, and even employees were more comfortable with the idea of the board’s power than its actual exercise. Altman, a well-known figure in the Silicon Valley startup scene and former president of Y Combinator, had developed a strong following.

Within just 24 hours of the announcement, reports surfaced that the OpenAI board was considering bringing Altman back as CEO. This change of heart can be attributed to the anger and panic felt by investors and others involved with the company. Satya Nadella, the CEO of Microsoft, a major partner of OpenAI, was reportedly furious about Altman’s departure and has been in contact with him, pledging support. Microsoft’s involvement is crucial as OpenAI has only received a fraction of the $10 billion investment, with a significant portion in the form of cloud compute purchases. If Microsoft withholds these credits and the rest of the cash investment, OpenAI could face financial difficulties.

As the board contemplates its next move, several top AI researchers and executives have already resigned. Greg Brockman, OpenAI’s co-founder and president, stepped down after being stripped of his position as chair. Following Brockman’s departure, three senior OpenAI researchers, including the director of research and the head of preparedness, also left. More resignations are expected to follow.

The power struggle between board members, particularly Quora CEO Adam D’Angelo and Sutskever, and Altman, has been seen as causing unacceptable collateral damage. Sutskever argued that removing Altman was necessary to protect OpenAI’s mission of making AI beneficial to humanity, suggesting that Altman’s commercial ambitions were starting to unsettle the board. However, the tech community, including OpenAI itself, expressed overwhelming support for Altman.

As Altman and Brockman explore a new AI-chip-focused venture and OpenAI’s employee stock sale faces uncertainty, the board faces an uncomfortable reversal. While Sutskever and the rest of the board may have believed that firing Altman was the right decision, it seems that it was not truly their decision to make.