Microsoft hires Sam Altman moments after OpenAI Rejects return

Chaos has consumed OpenAI, the company behind ChatGPT after hundreds of staff threatened to quit en masse if the board doesn't rehire Sam Altman, and then resign.

The open letter, signed by 550 of OpenAI's 770 employees demanded the board's immediate resignation, and said they would walk out if Sam Altman was not returned.

Altman was dramatically fired on Friday after allegedly lying to the board, in a move that sent shockwaves throughout Silicon Valley and the tech world globally, enraging their staff, and putting rival AI firms on notice of a possible talent exodus.

The Letter

After Altman's departure, only 4 board members remain, and the letter to the board read:

“Your actions have made it obvious that you are incapable of overseeing OpenAI. We are unable to work for or with people that lack competence, judgment and care for our mission and employees.”

It added that those endorsing the letter could join Altman and Brockman at Microsoft's new AI research unit. Microsoft is OpenAI's biggest shareholder, with Satya Nadella reportedly furious at Sam's firing, and offering him is 'full support'.

Board Rejects Sam Altman's Return

The board of directors said in a note to employees that Sam Altman would not be returning to the company, and named his second interim replacement in two days. Directly afterwards Microsoft announced it was hiring both Altman and Greg Brockman (OpenAI's president and co-founder) to lead an advanced AI research lab.

Meanwhile at OpenAI, the board appointed Emmett Shear (formerly CEO of Twitch) to replace Mira Murati as interim CEO. Their announcement said Emmett had 'a unique mis of skills, expertise and relationships that will drive OpenAI forward' according to an internal memo.

Back at Microsoft, Satya Nadella left an opening for those 700 former colleagues of Altman to join Microsoft directly, stating: "we look forward to moving quickly to provide them with the resources needed for their success,".

Altman for his part has said "the mission continues" on X.

OpenAI Investors Considering their options

Altman's sudden departure shocked the tech industry, in particular OpenAI investors such as Microsoft, Sequoia Capital, and Thrive Capital. Microsoft is heavily committed to OpenAI with a 13Bn dollar investment, and only learned of Altman's exit one minute before it was released to the public, while others had to wait for social media posts to learn. They were provided no further information since the firing.

The memo highlighted the Board's resolve to oust Altman:

“The board firmly stands by its decision as the only path to advance and defend the mission of OpenAI,”  -  Adam D’Angelo, Helen Toner, Ilya Sutskever, and Tasha McCauley.

adding:

“Put simply, Sam’s behavior and lack of transparency in his interactions with the board undermined the board’s ability to effectively supervise the company in the manner it was mandated to do,” 

Altman in recent months drew attention to the chasm between those who believe A.I is the most important advance since browsers and those who see it as moving too fast and the dangers in development. Board member Sutskever was concerned that Altman was too fixated on building OpenAI's commercial side while not addressing the dangers of A.I.

The board however did not cite any specific incidents involving Mr. Altman as the cause for removing him. Rather, it stated Altman had “lost the trust of the board of directors,” and that firing him was “necessary to preserve the board’s ability to execute its responsibilities and advance the mission of this organization.”

“It is paramount that any C.E.O. be honest and transparent with his or her board,” the memo said.

OpenAI and Mr. Altman did not immediately respond to requests for comment.

The company's governance is setup with a non-profit board which can decide on leadership and other matters without investors having any formal way to influence decisions. Despite this since Altman's firing Altman's supporters have pressured them with direct appeals from VCs, tech leaders, and employees. The lack of details or specific evidence supporting a case for Altman's removal encouraged dissent. Critics argue that the non-profit board was not fit for purpose given that OpenAI had become a business with 700 employees, a large client base, corporate partnerships, and being on track to post $1 billion in annual revenue.

OpenAI origins and History

Altman, Brockman, and Sutskeyer founded OpenAI in 2015 with 9 others, including Elon Musk (CEO of Tesla). The group founded the firm as a non-profit AI lab saying that unlike Meta, Google and other well known names, it would not be driven by commercial goals. Then in 2018 Elon Musk left the firm, and Sam Altman pivoted to a for-profit company controlled by a non-profit board. In the following years he raised the billions in investment needed to create ChatGPT.

Monday, as OpenAI employees signed the letter saying they might leave to join Mr. Altman’s new project at Microsoft, one name stood out: Mr. Sutskever. He wrote on X saying he deeply regretted his role in the board’s decision.

“I never intended to harm OpenAI,” he said. “I love everything we’ve built together and I will do everything I can to reunite the company.”