OpenAI board faces staff revolt over Sam Altman’s ouster

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The future of OpenAI remains uncertain after an extraordinary effort by employees and investors to remove the board failed to persuade its directors to step down and reinstate co-founder Sam Altman.

By the end of Monday, 747 of 770 OpenAI employees had signed a letter threatening to quit and join Microsoft if the three executives who are holding on refused to step down and reverse their decision to fire Altman on Friday, according to people with direct knowledge of the matter.

Meanwhile, venture capitalists backing the generative artificial intelligence startup backed away from the staffing demands and are exploring legal action to force the board to reverse course, according to several people with knowledge of their thinking. One person at a venture fund invested in OpenAI said “legal action could come as soon as tomorrow,” without specifying what form it would take.

But the board remained resolute and prepared to test employees’ willingness to quit, according to a person with direct knowledge of the negotiations between employees and board members. In their letter, staff said the directors had “undermined our mission and company” in the way they fired Altman and stripped his co-founder Greg Brockman of his position on the board. Brockman subsequently left the company.

Ilya Sutskever, the last remaining co-founder on the board and OpenAI’s chief scientist, signed the staff letter after apologizing on social media for his role in firing Altman without saying he would leave the board. He had come under increasing pressure from staff to reverse his position over the weekend, according to people familiar with the situation.

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Altman’s firing has plunged Silicon Valley’s most celebrated start-up into a deep crisis that has no obvious solution. OpenAI has been at the forefront of a boom in artificial intelligence, considered by many to be the most significant technological breakthrough since the smartphone or the creation of the Internet.

It has also presented a business opportunity to compete with AI companies that were captured by OpenAI’s release of its hugely popular ChatGPT chatbot last year. On Monday, companies including Anthropic and Cohere were dealing with a surge in interest from OpenAI customers looking to hedge their bets if the sclerosis at the startup continues, according to people with direct knowledge of the matter. The rivals were “crawling all over” staff at OpenAI in an attempt to lure away talented researchers, according to an investor in the startup.

In a social media post on Monday, Marc Benioff, CEO of software company Salesforce, asked OpenAI researchers to send him their resumes and offered to match their salaries. Mustafa Suleyman, founder of AI start-up Inflection, wrote that events at OpenAI were “so sad” but that his company was scaling up. “Come run with us!” he added.

In their letter, staff threatened to leave the company “immediately” if the board did not reverse course. Microsoft on Sunday committed to hiring Altman, Brockman and any other OpenAI staff who chose to join them in a new AI research subsidiary.

In addition to Sutskever, OpenAI’s directors are Adam D’Angelo, CEO of the question-and-answer service Quora, technology entrepreneur Tasha McCauley, and Helen Toner of the Center for Security and Emerging Technology at Georgetown University.

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On Sunday night, they dismissed Altman, who had reappeared at OpenAI headquarters, and anointed Emmett Shear, co-founder of the video streaming service Twitch, as interim CEO. He replaced Mira Murati, the chief technology officer who had been promoted to interim CEO on Friday. By Monday afternoon, early OpenAI investor Vinod Khosla had urged Shear to quit.

With both sides entrenched, Altman’s main supporter, Microsoft CEO Satya Nadella, said he would stand by the OpenAI co-founder. In interviews broadcast Monday, Nadella said he could not say who would be CEO Tuesday morning, but he would continue to support Altman whether he returned to OpenAI or worked internally at Microsoft. The software giant has been OpenAI’s biggest backer, providing hardware support and a number of investments.

Nadella said the 38-year-old entrepreneur would be able to pursue his side projects while working at Microsoft. Altman has a nuclear fission project and a cryptocurrency project and has been trying to start a device business and a chip business, according to people with knowledge of the matter. “We will work through the governance aspects of it,” Nadella said.

Ibrahim Ajami, head of ventures at Mubadala Capital, part of Mubadala Investment Company, a $284 billion Abu Dhabi sovereign wealth fund, said the chaos in OpenAI had underlined why “it’s very difficult to underwrite these companies today”. Mubadala has a partnership with Microsoft but has not invested in OpenAI.

“As long-term investors, we will value companies on their customers, deep partnerships, talent and long-term sound moat,” he said. “Where does it all sit today with OpenAI?”

Additional reporting by Camilla Hodgson in San Francisco

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