A Toxic Love Story: OpenAI and Sam Altman

It seems that Sam Altman has been caught in a schoolyard game of “loves me, loves me not” with OpenAI. After founding OpenAI (with the help of Elon Musk’s wallet) in 2015, Altman served as the company’s CEO and said he “loved [his] time” at the “transformative” company. Thus, he was “shocked” to be ousted by the board of directors on November 17th:

The board cited concerns about Altman’s lack of consistent candor in communications, expressing an overall loss of confidence in his leadership abilities. (Ouch.) The departure led to a reorganization at OpenAI, with Mira Murati appointed as interim CEO. The president of OpenAI, Greg Brockman, resigned in the aftermath of Altman’s departure.

Naturally, Sam took the route often traveled in such a situation: he rebounded with Microsoft. On November 20, Microsoft CEO Satya Nadella announced that both Altman and Brockman would be joining their AI research team. Back at home, OpenAI waited just two days before replacing their interim CEO Murati with Twitch CEO Emmett Shear; finding someone new seemed a bit harder for OpenAI than for Sam.

On November 20, the OpenAI board realized that its employees’ loyalty was not where they had hoped. Almost all 800 OpenAI employees at OpenAI signed a letter with two demands: Altman returns as CEO, and the board reigns — or else they would all quit. The letter said of the board: "Your conduct has made it clear you did not have the competence to oversee OpenAI." Not only had the board facilitated a sudden break, but they had also failed to impress their employees with how they handled the situation.

Literally overnight, Altman and OpenAI were back together. On November 21, Altman reached an agreement in principle to return as CEO. Altman stated he was “looking forward to returning,” and though still “collaborating to figure out the details,” he would be returning to his role. It seems that Altman won’t be on any Microsoft Teams meetings anytime soon. But, after such a loyal run with OpenAI, it might be the better option to stick with what he knows.

The Verdict:

Choosing a board can have wild and unexpected implications. CEO Sam Altman’s ousting by the board of OpenAI highlights the importance of careful board selection. A well-chosen board can provide effective oversight and strategic guidance, tending to the economic needs of a company; however, if there's a lack of transparency or alignment of values between the board and employees, it can lead to discontent.

Choosing a nonprofit route, as OpenAI initially did, has its pros and cons. Pros include a mission-driven focus and potential avoidance of profit-driven conflicts. Nonprofits can attract philanthropic support and foster collaboration, but they can also pose financial challenges, reliance on donations, and potential constraints on rapid decision-making due to a focus on long-term goals.

In the case of OpenAI, the transition from a nonprofit to a "capped-profit" model raised concerns about maintaining the initial mission. It seems that achieving balance depends upon selecting a board that aligns with the organization's values, irrespective of its profit status, and fostering open communication to mitigate employee dissatisfaction and ensure long-term success.

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