What’s behind the hasty firing of Sam Altman from OpenAI?

OpenAI's board of directors surprisingly fired their CEO and co-founder, and one of the most prominent stars in the artificial intelligence industry, Sam Altman. In a company blog post, the board also noted that co-founder and company president Greg Brockman will end his role as chairman of the board, and announced the appointment of Mira Murati, the company's chief technology officer, as interim CEO.

“The board no longer has confidence in his ability to continue leading OpenAI,” they noted, but did not give reasons for the sudden dismissal. "His departure follows a review process by the board, which concluded that he was not consistently transparent in his communication with the board, which hinders his ability to exercise his responsibility.”

Ousted Open AI CEO Sam Altman during recent visit to Israel

"I loved my time at OpenAI," Altman wrote on X (formerly Twitter) shortly after his firing was announced. "Most of all I loved working with such talented people." A few hours later, Brockman announced that he would also resign from his other positions in the company. "Sam and I are shocked and saddened by what the board did today," he wrote on X, describing for the first time part of the course of events. According to Brockman, he and Altman received the layoff notice yesterday, Altman just half an hour before the official announcement, and he just five minutes before the announcement, both by OpenAI co-founder and chief scientist Ilya Sutskever, who is also a board member. The firings and departures of Altman and Brockman respectively leave Sutskever as the last remaining OpenAI co-founder on the board.

A reassuring conversation that didn't really reassure

The announcement surprised the company's employees who learned about Altman's dismissal in a public announcement. Reuters reported that the company hastened to convene an emergency meeting for employees already that day at noon to discuss the news with the employees. Murati reportedly sought to reassure employees, noting that OpenAI's partnership with Microsoft is stable and its executives continue to express confidence in the startup. The results of the conversation were decidedly limited, and a short time later, three senior researchers in the company announced their departure: research director Jakub Pachocki, head of the potential risks team Aleksander Madry, and veteran researcher Szymon Sidor.

It can be assumed that the OpenAI board will be required to offer more complex explanations regarding the decision to quickly remove Altman, in order not to lose the trust of the company's employees at the very least. It can be assumed that apart from those who quit, other employees will follow in Altman's footsteps if he decides to start a competing company soon.

According to technology reporter Kara Swisher's reports, backed by Brockman publicly, "the board members who voted against Altman felt he was manipulative and stubborn and wanted to do what he wanted to do." It was also noted that at the center of the move, apparently, is Sutskever who recruited the members of the board to his side. But these reports are partial, and the course of the board and its concrete circumstances remain a source of much speculation. Not only is it unclear what Altman did that led to the determination that he is unreliable, but the manner in which he was fired is unusual in nature. Not only were the layoffs abrupt, but they were made by a company that has become one of the most famous in Silicon Valley and against a beloved manager, who has held key positions in it since its inception in 2015.

The partner Microsoft did not know about the layoffs either

In recent years Altman has become the face of the company, and under his leadership, some of the most famous and successful generative artificial intelligence products of the year were launched - including ChatGPT which was launched exactly a year ago. Since then, it has gained over 100 million monthly users and its paid version is used by about 80% of Fortune 500 companies. Just last week, Altman led the first OpenAI developer conference, where he announced a suite of new updates including an app store for artificial intelligence products. "Sam Altman is my hero," former Google CEO Eric Schmidt posted on X with the announcement, "he built a company from nothing to a value of $90 billion and changed our world forever," he wrote.

Altman was one of the founders of OpenAI, then established as a non-profit company, with an investment of $1 billion from a series of well-known entrepreneurs such as Elon Musk, Peter Thiel, and Reid Hoffman. Altman and Musk initially served as co-chairmen with the goal of "promoting digital intelligence in a way that is likely to benefit all of humanity, without limiting the need to generate a financial return." In 2018, Altman led the company's change to a limited profit model, resulting in two significant events - Musk's departure, and the entry of Microsoft as an investor. Over the past year, Microsoft deepened its investment by $10 billion, marking the largest investment of 2023.

According to the reports, Microsoft also knew nothing about the rapid layoffs, but only one minute before the company released news to the public. In response, Microsoft shares fell by 2% yesterday. Microsoft CEO Satya Nadella said: "We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and exciting product roadmap; and remain committed to our partnership, and to Mira and the team. Together, we will continue to provide the significant benefits of this technology to the world."

The board that decided to fire Altman includes Sutskever; Quora CEO Adam D'Angelo; tech entrepreneur Tasha McCauley, and Helen Toner of the Georgetown Center for Security and Emerging Technology. OpenAI's unique structure has resulted in a board of directors being that of a non-profit company, but responsible for overseeing a for-profit company. The members of the board, as well as the senior management like Altman, have no shares or almost no shares in OpenAI.

Although OpenAI is a successful startup by all accounts, it does not excel in protecting its founders, and it seems that the main dispute between them revolves around questions of safety and trust in the development of advanced artificial intelligence products. The founders wanted to develop artificial intelligence in a "responsible" manner, a vague concept in itself, out of the fear that the end of a race in the field will be "general artificial intelligence", or a computer that will surpass man in its capabilities, which will put humanity in danger. This is why the company was established as a non-profit.

Altman not only changed this designation but also, according to some, began to rush and launch products to the public without taking into account questions of liability. We know that friction and disagreements arose around this activity, not only from the departure of the founders but their activities afterward. For example, Musk, who left the company when he decided to turn to "profit goals", opened a competing company called xAI last summer, because OpenAI became "hungry for profit" and the partnership with Microsoft made it subject to "dubious" market incentives. In 2021, co-founder and former vice president of research at OpenAI, Dario Amodei, founded a competing company, Anthropic, as a public benefit corporation "after a disagreement on the company's direction". Amodei brought with him several researchers from OpenAI, including Tom Brown, the lead engineer of the GPT3 language model.

Editor's Note: Since Friday, it is understood that The OpenAI board is in discussions with Sam Altman to return to the company as its CEO, according to multiple people familiar with the matter.