Over the past week, the entire tech industry has been glued to their screens as the leading artificial intelligence company and creator of ChatGPT, OpenAI, was embroiled in a power struggle that saw its CEO fired, replaced twice, and eventually brought back, all within five days’ time.
The saga began after the OpenAI board of directors suddenly fired CEO Sam Altman, one of the founders of OpenAI, who founded the company in 2015 alongside investors like Peter Thiel and Elon Musk. Altman would go on to officially become its CEO in 2019 and remain there until all of this.
Just to chip in: OpenAI was co-founded by a group of tech visionaries and entrepreneurs, including Elon Musk, Sam Altman, Greg Brockman, Ilya Sutskever, Wojciech Zaremba, and John Schulman, among others.
Its board of directors is responsible for strategic decisions, and its day-to-day operations are overseen by an executive team that manages various aspects of the organization, including research, business development, and partnerships.
Initially, the company was founded as a non-profit AI research organisation in December 2015. Its original mission was to advance artificial intelligence in a way that benefits humanity as a whole. However, the organisation later evolved its structure to include elements of for-profit activities to secure additional funding for its ambitious research goals.
However, later on, it transitioned into a hybrid for-profit structure. The company now operates as a capped-profit company, which means it aims to generate profits but within certain limits, ensuring that the pursuit of profit doesn’t compromise its commitment to its mission of developing artificial general intelligence (AGI) safely and beneficially for humanity.
This structure allows it to attract investment, just like the Microsoft investment, while continuing its research and development efforts in AI.
Back to the timeline: The news of the sack of Altman sent shockwaves in the AI space globally because he is naturally seen as the face of what OpenAI, which is a major player in the world of artificial intelligence, is doing.
Fired on Friday
According to the company’s president, Greg Brockman via a post on X, it all started with a call on Thursday, November 16. Apparently, Ilya Sutskever, the chief scientist at OpenAI and a co-founder, texted Altman on Thursday evening about scheduling a Friday noon call.
After that, Friday, November 17 was supposed to be just another typical day in the rapidly expanding AI company. However, out of nowhere in the late afternoon, the OpenAI board of directors declared that CEO Sam Altman would be leaving.
The company’s statement reads:
“Mr Altman’s departure follows a deliberative review process by the board, which concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities,” OpenAI’s post said. “The board no longer has confidence in his ability to continue leading OpenAI.”
OpenAI’s board did not share what exactly its issue with Altman was. Whatever it was, though, seemed extremely serious, as the board didn’t even wait until the markets closed. Many companies try to dump any negative press at the end of the day in order to control the most damaging fallout. This was not the case here.
The board also announced that OpenAI CTO, Mira Murati would take over as interim CEO. Just to note, Greg alleges that Mira Murati, the interim CEO, was informed on Thursday night that Altman would be fired.
Rumours fly, and Greg steps down
Rumours and speculation swirled on social media, with tech industry heads, reporters, and onlookers trying to make sense of the situation based on the little information provided in the board’s announcement.
Tech journalist, Kara Swisher quickly reported that based on what information she had from sources, there was a “misalignment” between OpenAI’s for-profit side, represented by Altman, and the nonprofit side, which is controlled by the board.
According to Swisher, OpenAI cofounder and chief scientist, Ilya Sutskever was recently able to get the board behind him regarding concerns he had about the more profit-driven direction that OpenAI was moving into.
Soon after the company’s announcement, Altman broke his silence via X, the Elon Musk-owned platform formerly known as Twitter.
“I loved my time at Openai. it was transformative for me personally, and hopefully the world a little bit. Most of all I loved working with such talented people,” Altman posted. “will have more to say about what’s next later.”
But Friday still wasn’t over yet.
Consequently, upon this development, cofounder and president Greg Brockman announced that he had decided to quit the company based on the news. Brockman had been mentioned in OpenAI’s announcement as stepping down as board chair, but the company explicitly stated he was staying with the company in his other capacities.
Brockman’s sudden Friday night resignation seemed a surprise to everyone on the OpenAI board of directors, too.
Three senior OpenAI researchers—director of research, Jakub Pachocki; the head of an AI risk team, Aleksander Madry; and a senior researcher, Szymon Sidor—also announced their resignations from the company.
Brockman then followed up that announcement with another post, sharing his own version of how Altman’s firing went down. According to Brockman, Altman received a text message on Thursday evening from Sutskever about a meeting the next day.
At that Friday meeting over Google Meet, Altman was fired by the entire board, minus Brockman, who was not in attendance. Brockman says he was later informed he was being removed from the board but being retained in his other roles at the company.
Saturday: Investors become unhappy and want Altman back
Satya Nadella, the CEO of Microsoft, a major investor in and partner with OpenAI, published a statement about Altman’s firing:
“As you saw at Microsoft Ignite this week, we’re continuing to rapidly innovate for this era of AI, with over 100 announcements across the full tech stack from AI systems, models and tools in Azure to Copilot.
“Most importantly, we’re committed to delivering all of this to our customers while building for the future. We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and an exciting product roadmap; and remain committed to our partnership and to Mira and the team. Together, we will continue to deliver the meaningful benefits of this technology to the world,” he said.
However, in an all-hands meeting on Friday afternoon, Sutskever defended Altman’s ouster. He dismissed suggestions that pushing Altman out amounted to a “hostile takeover” and claimed that it was necessary to protect OpenAI’s mission of “making AI beneficial to humanity.”
Still, the investors were not satisfied, as they were reportedly exerting pressure on OpenAI’s board to reinstate Altman, going so far as to recruit Microsoft. Nadella is said to be sympathetic.
As a side note to this, big tech companies like Microsoft have invested heavily in OpenAI. The computer giant alone has pledged $13 billion to the company. And it’s certainly not because Microsoft feels strongly about the AI safety ethos of the nonprofit organisation. It is investing in the for-profit OpenAI, led by Altman.
After so much pressuring by its investors, The Verge reported shortly after the Forbes report that the board reached out to Altman in an attempt to work out a return to the company. This was all occurring less than 24 hours after Altman’s firing.
An agreement was reportedly reached on Saturday that brought Altman and Brockman back to the company. In addition, the current board would resign. However, a Saturday night deadline passed, and the deal wasn’t closed.
Meanwhile, some OpenAI employees were already quoting Altman’s tweet, and drumming up support for him.
At this point on Saturday night, it wasn’t exactly clear what was happening at OpenAI. Was Altman back? Was he going to start his own AI company? The uncertainty was starting to become too much for the majority of OpenAI employees, who voiced their disapproval of Altman’s firing.
By late Saturday night, it was clear that Altman had their support, as many began publicly standing beside OpenAI’s then-former CEO. Altman, in return, shared his appreciation for his colleagues’ support.
As the day ended, OpenAI was assuring its employees that an agreement to bring Altman back was in the works and that the organisation “remains optimistic.”
However, in an internal memo obtained by Axios sent Saturday morning, COO Brad Lightcap said the announcement “took [the management team] by surprise” and that management had had “multiple conversations with the board to try to better understand the reasons and process behind their decision.” Discussions were ongoing as of Saturday morning, per the memo.
“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap added. “This was a breakdown in communication between Sam and the board … We still share your concerns about how the process has been handled, are working to resolve the situation, and will provide updates as we’re able.”
Sunday’s events unravel
At this point, the planned sale of OpenAI employee shares, which would value the startup at about $86 billion, was in jeopardy. The Information, speaking to three sources formerly with the company, reports that they no longer expect the sale—led by Thrive Capital—to happen, or, if it does, to come with a lesser valuation because of the recent turn of events.
But in a post later, Altman appeared to be back in the OpenAI offices, ostensibly continuing the negotiations for his return to the company.
According to a report from The Information, Microsoft CEO Satya Nadella became personally involved in the discussions in order to bring Altman back to the AI company. Interm CEO Murato also rallied in support of Altman’s return.
Bloomberg reported that Lightcap and Murati, among others, were pushing the board to reinstate Altman. But, unsurprisingly, the directors resisted. On midday Sunday, the board hadn’t resigned out of concern over who could replace them and was vetting candidates.
And all negotiations fell apart later that day as OpenAI announced it was bringing former Twitch executive Emmett Shear onboard as its new interim CEO.
OpenAI board considers merger
OpenAI’s board of directors approached Dario Amodei, the co-founder and CEO of rival large-language model developer Anthropic, about a potential merger of the two companies, The Information reports. The approach was part of an effort by the AI company to persuade Amodei to replace Altman as CEO, but Amodei quickly turned down the CEO offer.
Microsoft Monday
Monday started off with a bang as Microsoft CEO, Nadella had a big announcement to make in the early hours of the morning: Altman and Brockman were joining Microsoft.
As reported by The Verge, Altman’s move to Microsoft wasn’t a done deal, and both Altman and Brockman were still open to returning to OpenAI. That was if the remaining board members who initially fired him stepped aside. But later on, the big move was announced.
“We’re extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team,” Nadella posted on X. “We look forward to moving quickly to provide them with the resources needed for their success.”
Nadella also said in his post that Microsoft was committed to its partnership with OpenAI. But this arrangement seemed like a difficult one to maintain. Microsoft was clearly bringing Altman in to work on an AI product of the company’s own.
Furthermore, by this point, hundreds of OpenAI employees were threatening to quit the company and jump ship to Microsoft over Altman’s firing. Even more alarming, Sutskever, the OpenAI cofounder and chief scientist who allegedly started the whole issue, had now turned on the board.
The New York Times reports that, before his ousting, Sam Altman made a move to push out board member Helen Toner because he thought a paper she had co-written was overly critical of OpenAI. That, among other issues, led to OpenAI’s current predicament.
Speaking of which, The Times indicates that negotiations to hire Altman back continue, but that one major sticking point remaining is “guardrails” meant to improve Altman’s communication with the board.
A Tuesday/Wednesday return
At the start of the week, the company’s board of directors was reportedly in talks with Sam Altman about returning as CEO as soon as this week. According to Bloomberg, in a brief, citing sources close to the matter, discussions were happening between Quora CEO Adam D’Angelo, one current member of the OpenAI board, and Altman, and possibly other board members as well.
In a sudden and late announcement on Tuesday and early Wednesday, the company revealed that it and Altman “have reached an agreement in principle” for him to return as the company’s CEO. In addition to Altman’s return, its new “initial” board will include former Salesforce chief executive Bret Taylor, former US Secretary of the Treasury Larry Summers, and Quora founder Adam D’Angelo.
Also, a vast majority of the board of directors was gone.
There are still many unanswered questions about the whole saga. For one, we still don’t know OpenAI’s concerns about Altman that led the board to abruptly fire him and say they basically could not trust him.
However, we know that Elon Musk, the former co-founder of OpenAI, released a letter that was shared with him earlier on, citing allegations of misconduct against Altman by the employees. The post has since been deleted by Elon Musk, but you can find the archived copy here.