Sam Altman has been abruptly ejected from the board of OpenAI, in a move which sent shockwaves through the tech industry and raised questions over the direction of the company amid fears of internal rifts among senior management.
The 37-year-old reportedly received a text from a fellow board member inviting him to an impromptu Google Meet video call yesterday, whereupon Altman discovered he had been fired.
“Today was a weird experience in many ways,” a shaken Altman later posted on X, formally Twitter. ‘Ctrl, Altman, Delete’, as one analyst at JPMorgan succinctly put it in a note on the entrepreneur’s departure.
Altman had been at the helm of the world’s best-known AI business. He led OpenAI through a period of eye-wateringly fast growth, which saw its AI-powered chatbot, ChatGPT, hit 100 million regular users within weeks of its launch, tech giant Microsoft inject $10 billion in funding, and the firm reportedly hitting a valuation of as much as $90 billion. Such was the explosion of hype around ChatGPT, OpenAI soon ran out of server capacity and was forced to turn away customers.
The success propelled Altman to stardom as the tech boss became the face of generative AI, joining the ranks of Elon Musk, Bill Gates and Mark Zuckerberg to be a celebrity entrepreneur in his own right. He toured the globe with bold proclamations about the future of AI, appearing before lawmakers in the US Congress and brushing shoulders with PM Rishi Sunak at the UK’s AI safety summit, as media outlets pored over his every remark. But Altman now finds himself out of the firm he had been deeply involved in for more than eight years.
So why was Sam Altman fired from OpenAI?
OpenAI did not give much away in its offer of an explanation. In a statement released late on Friday, the San Francisco-based business said it had “concluded that he was not consistently candid in his communications with the board, hindering its ability to exercise its responsibilities.”
“The board no longer has confidence in his ability to continue leading OpenAI,” the firm said, adding that chief technology officer, Mira Murati, would be standing in as interim CEO until a permanent replacement had been found. There was no evidence offered for why board members believed Altman had not been ‘candid’ with them.
The board’s announcement blindsided lead investor Microsoft, as well as senior members of Open AI, including its co-founder and president, Greg Brockman, who immediately resigned after hearing the news. Three senior researchers Jakub Pachocki, Aleksander Madry and Szymon Sidor also quit in retaliation at the move, The Information reported.
What happened at OpenAI today is a Board coup that we have not seen the likes of since 1985 when the then-Apple board pushed out Steve Jobs
“Sam and I are shocked and saddened by what the board did today,” Brockman wrote on X. “We too are still trying to figure out exactly what happened.”
Tech investors reeled at the sudden board shakeup. “No one has a clue” why this happened, Seb Wallace, VC investor at London-based Triple Point, told the Standard. “Genuinely everybody is perplexed.”
Others put it in even stronger terms. Seasoned Silicon Valley venture capitalist Ron Conway wrote: “What happened at OpenAI is a board coup that we have not seen the likes of since 1985 when the then-Apple board pushed out Steve Jobs.
“It is shocking; it is irresponsible; and it does not do right by Sam.”
Some believe a tension over the firm’s pivot toward a ruthless drive on profit-making was responsible for an apparent rift at senior levels in the company. OpenAI was founded as a non-profit, but Elon Musk, an early investor, said in February that it had become a “closed source, maximum profit company…not what I intended at all.”
In a message seen by the Standard, moments after Altman’s exit, OpenAI contacted its business customers to tell them it was changing its billing rules, such that companies would have to pay in advance for credits to use its API service, a move which would likely ramp up the firm’s cashflow.
“The board fired the CEO and 1 hour later, 1000s of customers received an email saying you now have to pre-pay,” said James Wise, partner at London-based venture capital firm Balderton.
“It doesn’t take a super sleuth to work out what’s happened.”
There have also been reports of internal divisions over the company’s AI safety policies, with some expressing concern over safety considerations. According to the Wall Street Journal, OpenAI’s chief scientist and co-founder Ilya Sutskever had been “worried about the long-term safety” of OpenAI’s products and was keen for greater alignment with human values. But in a company meeting following Altman’s departure, Sutskever refused to tell staff why its CEO had left.
Others point to the fact that Sam Altman has some history when it comes to sudden departures from company boards.
When Altman was on the board of online discussion forum Reddit, CEO Yishan Wong resigned over what Altman described as "disagreement with the board about a new office.” Altman stepped in as CEO, but only for a mere eight days before a replacement was found.
The tech entrepreneur was also appointed president of San Francisco-based tech start-up investor Y Combinator in 2011, and became president of its parent company, YC Group, in 2016. But by 2019 he had been relegated to chairman, and by 2020, said he would be leaving the board and continuing as an adviser – a role which he never formally assumed.
Former Bloomberg journalist Eric Newcomer wrote: “Altman went from president, to chairman, to being an adviser, to having no affiliation with Y Combinator without much detailed reporting from the press. YC successfully swept, what seems to be a real schism, under the rug.”
What recourse does Altman have following his ejection from the board? The answer could well be: very little. While a board member of OpenAI since its inception in 2015, he had made a point of not owning any shares in the company, a move which he argued preserved his focus on AI safety instead of pursuing profit.
As the entrepreneur quipped today: “If I start going off, the OpenAI board should go after me for the full value of my shares.”