OpenAI’s board stands firm in the face of employee revolt over Sam Altman’s ouster

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The future of OpenAI remains uncertain. Extraordinary efforts by employees and investors to oust the board led to the resignation of its directors and failed to reinstate co-founder Sam Altman.

By the end of Monday, 747 of the 770 OpenAI employees had signed a letter threatening to leave and join Microsoft. The three directors refused to resign and did not reverse Friday’s decision to fire Altman, according to people with direct knowledge of the matter. .

Meanwhile, venture capitalists backing the artificial intelligence startup have pushed back on the employees’ demands and are exploring legal action to overturn the board, according to several people familiar with their thinking. One person at a venture fund invested in OpenAI said “there will be legal action as soon as tomorrow,” without specifying what form it would take.

But the board remained determined and was willing to test employees’ willingness to walk away, according to a person with direct knowledge of negotiations between employees and directors. The employees said in their letter that the directors “undermined our mission and the company” by firing Altman and stripping his co-founder Greg Brockman of his position on the board. Brockman left the company.

Ilya Sutzkever, the last remaining co-founder and OpenAI’s chief scientist on the team, signed a letter from staff after apologizing on social media for firing Altman, rather than saying he was leaving the team. According to people familiar with the situation, he came under increasing pressure from staff to reverse his position over the weekend.

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Altman’s dismissal has plunged Silicon Valley’s most prominent start-up into a deep crisis. OpenAI is at the forefront of the development of artificial intelligence, considered by many to be the most important technological advance since the creation of the smartphone or the Internet.

AI companies caught on last year with the release of OpenAI’s wildly popular ChatGPT chatbot have also provided a competitive business opportunity. On Monday, companies including Anthropic and Coheer were said to be dealing with improving OpenAI customer interest if early sclerosis continues, according to people with direct knowledge of the matter. According to one investor in the start-up, competitors are “all over” OpenAI employees in an effort to attract talented researchers.

In a social media post on Monday, Marc Benioff, chief executive of software giant Salesforce, asked OpenAI researchers to send their CVs and offered to match their salaries. Mustafa Sulaiman, founder of AI start-up Inflection, posted that the events at OpenAI were “very sad” but that his company was on the rise. “Run with us!” he added.

In their letter, the employees threatened to leave the company “immediately” unless the board reversed course. Microsoft on Sunday committed to hiring Altman, Brockman and other OpenAI employees who choose to join them in a new AI research subsidiary.

In addition to Chutzkaver, OpenAI’s directors are Adam D’Angelo, CEO of question-and-answer service Quora, tech entrepreneur Tasha McCauley, and Helen Donner of Georgetown University’s Center for Security and Emerging Technologies.

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

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With both sides bolstered, Microsoft Chief Executive Satya Nadella, a key supporter of Altman, said he would stand by the OpenAI co-founder. In on-air interviews Monday, Nadella said he could not say who the chief executive would be Tuesday morning, but that he would continue to support Altman whether he returns to OpenAI or works at Microsoft. The software company has been a huge supporter of OpenAI, providing hardware support and continued investments.

Nadella said the 38-year-old entrepreneur will be able to continue his side projects while working at Microsoft. Altman has a nuclear fission venture and a cryptocurrency project, and has sought to launch a device company and 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 the $284bn Abu Dhabi sovereign wealth fund Mubadala Investments, said the confusion over OpenAI underscored that “it’s very difficult to underwrite these companies today”. Mupadala has a partnership with Microsoft but has not invested in OpenAI.

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

Additional reporting by Camilla Hodgson in San Francisco

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