Market Pulse: Why Was Sam Altman Fired From OpenAI?
Market Pulse: Why Was Sam Altman Fired From OpenAI?
OpenAI's board just surprise-fired CEO Sam Altman. Here's what we know and what we think could've happened.
OpenAI’s board just announced the abrupt firing of Sam Altman as CEO.
CTO Mira Murati will replace Altman as interim CEO. Chairman of the board Greg Brockman is also stepping down but will remain in the company, reporting to Murati.
On Altman, the board had this to say:
“Mr. Altman’s departure follows a deliberative review process by the board, which 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.”
This is a stunning turn of events for someone that is undoubtedly the face of the burgeoning AI revolution. To the public, in many ways, Sam Altman was OpenAI and OpenAI was Sam Altman.
This abrupt firing caught everyone off-guard. The cryptic press release from the board left us with more questions than answers.
Here’s what we think could have happened:
Sam Altman recently represented OpenAI in several widely publicized events as the company’s definitive CEO. Most notable of them are the OpenAI DevDay two weeks ago and a high profile panel in APEC discussing AI just yesterday. For the board to oust both Altman and Brockman so suddenly using the phrase “not consistently candid in his communications”, it means that some disastrous news broke internally in the last 24 hours that caused them to make such a drastic move. This news was known to Altman, and probably Brockman, but not the board. The board might be trying to get ahead of the public release of this news by distancing itself from Altman to save the company.
The abruptness of this move after a strong wave of positive publicity for OpenAI with Altman at the helm means that it must be severe. It could be related to: business or accounting fraud, a conflict of interest, or personal misconduct.
This ousting is unlikely to be caused by some internal boardroom power struggle between Microsoft and Altman or else it’d be done more gracefully with the news being released at a better time and Altman stepping down to a non-executive role, rather than being pushed out completely.
We have to stress that this is all speculation and unfortunately, we won’t know what really happened until we do.
What is probably true is that Altman is having a very bad day beyond just losing his CEO job at OpenAI.
The Details
Who’s on OpenAI’s board?
Ilya Sutskever (OpenAI Chief Scientist)
Adam D’Angelo (Quora CEO)
Tasha McCauley (GeoSim Systems CEO)
Helen Toner (Director of Strategy at Georgetown's Center for Security and Emerging Technology)
What’s the ownership structure like?
Unfortunately, the ownership structure of OpenAI is opaque. Microsoft is probably a majority shareholder, having invested $11 billion in aggregate while funds from other investors total just under $1.5 billion.
Some interesting events that led up to this announcement…
November 9th: Microsoft temporarily cuts employees off from the internal use of ChatGPT due to “security and data concerns”. Once access was reinstated, employees were encouraged to use Bing Chat instead (powered by OpenAI models)
November 15th: OpenAI pauses new ChatGPT Plus sign-ups.
Sam Altman has been doing random things on the side
During his tenure as OpenAI CEO, Altman launched a seemingly random cryptocurrency company called Worldcoin that aims to combine iris biometric technology and cryptocurrency technology to “become the world's largest digital identity and financial network”.
Like… what? 👁️🌎
It was also recently reported that Altman was collaborating with Apple’s former chief design officer Jony Ive on an “AI smartphone”. Whether this project is meant to be carried out inside OpenAI or as a separate company is unknown.
Altman’s extensive non-OpenAI business dealings increases the possibility of a conflict of interest violation.
Post-firing endorsements
We know of two high profile post-firing endorsements of Sam Altman so far, from Eric Schmidt (former Google CEO) and Brian Chesky (Airbnb CEO).
“Sam Altman is a hero of mine. He built a company from nothing to $90 Billion in value, and changed our collective world forever. I can't wait to see what he does next. I, and billions of people, will benefit from his future work- it's going to be simply incredible. Thank you @sama for all you have done for all of us.” - Eric Schmidt
“Sam Altman is one of the best founders of his generation and has made an immense contribution to our industry” - Brian Chesky