OpenAI board stands firm in face of staff revolt over Sam Altman’s ousting

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The future of OpenAI remains uncertain after extraordinary efforts by employees and investors to oust the board failed to persuade its directors to resign and reinstate co-founder Sam Altman.

By the end of Monday, 747 out of 770 OpenAI employees had signed a letter threatening to quit and join Microsoft if the three directors holding out refused to resign and reverse their decision to sack Altman on Friday, according to people with direct knowledge of the matter.

Meanwhile, venture capitalists backing the generative artificial intelligence start-up swung behind staff demands and were exploring legal measures to force the board to reverse course, according to multiple 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 that 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 staff and the board directors. 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 quit the company.

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

Altman’s sacking has plunged Silicon Valley’s most feted start-up into a profound crisis that has no obvious resolution. OpenAI has been at the forefront of a boom in artificial intelligence, which is regarded by many as the most significant technological breakthrough since the smartphone or the creation of the internet.

It has also presented a business opportunity to rival AI companies caught out by OpenAI’s release of its hugely popular ChatGPT chatbot last year. On Monday, companies including Anthropic and Cohere were dealing with an uptick in interest from OpenAI customers looking to hedge their bets should the sclerosis at the start-up continue, according to people with direct knowledge of the matter. Rivals were also “crawling all over” staff at OpenAI in a bid to draw talented researchers away, according to an investor in the start-up.

In a social media post on Monday, Marc Benioff, chief executive of software company Salesforce, asked OpenAI researchers to send him their CVs and offered to match their salaries. Mustafa Suleyman, founder of AI start-up Inflection, posted 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 “imminently” if the board did not reverse course. Microsoft committed on Sunday to hiring Altman, Brockman and any other OpenAI staff who chose to join them at a new AI research subsidiary.

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

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

With both sides entrenched, Altman’s key supporter, Microsoft chief executive Satya Nadella, said he would stand by the OpenAI co-founder. In broadcast interviews on Monday, Nadella said he could not say who would be chief executive on Tuesday morning, but he would continue backing Altman whether he returned to OpenAI or worked in-house at Microsoft. The software giant has been OpenAI’s biggest backer, providing hardware support and a series 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 venture and a cryptocurrency project and has sought to start a device company and a chip business, according to people with knowledge of the matter. “We’ll work through the governance aspects of it,” Nadella said.

Ibrahim Ajami, head of ventures at Mubadala Capital, part of Mubadala Investment Company, a $284bn Abu Dhabi sovereign wealth fund, said the chaos at OpenAI had underscored 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 would value companies on their customers, deep partnerships, talent and long-term defensible moat,” he said. “Where does that all sit today with OpenAI?”

Additional reporting by Camilla Hodgson in San Francisco