It’s been an eventful weekend at OpenAI’s headquarters in San Francisco. In a shock transfer Friday, the corporate’s board of administrators fired co-founder and CEO Sam Altman, which set off an institutional disaster that has seen senior employees resign in protest with almost 700 rank-and-file workers threatening to do the identical. Now the board is dealing with requires its personal resignation, even after Microsoft had already swooped in to rent Altman’s cohort away for its personal AI initiatives. Right here’s the whole lot it is advisable know in regards to the scenario to carry your personal at Thanksgiving on Thursday.
The way it began
Thursday, November 16
This saga started ceaselessly in the past by web requirements, or final Thursday within the frequent parlance. Per a tweet from former-company president Greg Brockman, that was when OpenAI’s head researcher and board member, Ilya Sutskever, contacted Altman to arrange a gathering the next day at midday. In that very same tweet chain (posted Friday evening), Brockman accused the corporate of informing the primary interim-CEO, OpenAI CTO Mira Murati, of the upcoming firings at the moment as properly:
– Final evening, Sam received a textual content from Ilya asking to speak at midday Friday. Sam joined a Google Meet and the entire board, besides Greg, was there. Ilya instructed Sam he was being fired and that the information was going out very quickly.
– At 12:19PM, Greg received a textual content from Ilya asking for a fast name. At 12:23PM, Ilya despatched a Google Meet hyperlink. Greg was instructed that he was being faraway from the board (however was important to the corporate and would retain his function) and that Sam had been fired. Across the identical time, OpenAI printed a weblog put up.
– So far as we all know, the administration workforce was made conscious of this shortly after, apart from Mira who discovered the evening prior.
Friday, November 17
Every part kicked off at that Friday midday assembly. Brockman was knowledgeable that he can be demoted — faraway from the board however stay president of the corporate, reporting to Murati as soon as she’s put in. Barely ten minutes later, Brockman alleges, Altman was knowledgeable of his termination as the general public announcement was printed. Sutskever subsequently despatched a company-wide e mail stating that “Change can be scary,” per The Info.
Later that afternoon, the OpenAI board together with new CEO Murati addressed a “shocked” workforce in an all-hands assembly. Throughout that assembly, Sutskever reportedly instructed workers the strikes will finally “make us really feel nearer.”
At this point, Microsoft, which just dropped a cool $10 billion into OpenAI’s coffers in January as part of a massive, multi-year investment deal with the company weighed in on the day’s events. CEO Satya Nadella released the following statement:
As you saw at Microsoft Ignite this week, we’re continuing to rapidly innovate for this era of AI, with over 100 announcements across the full tech stack from AI systems, models and tools in Azure, to Copilot. Most importantly, we’re committed to delivering all of this to our customers while building for the future. We have a long-term agreement with OpenAI with full access to everything we need to deliver on our innovation agenda and an exciting product roadmap; and remain committed to our partnership, and to Mira and the team. Together, we will continue to deliver the meaningful benefits of this technology to the world.
By Friday evening, things really began to spiral. Brockman announced via Twitter that he quit in protest. Director of research Jakub Pachocki and head of preparedness Aleksander Madry announced that they too were resigning in solidarity.
How it’s going
Saturday/Sunday, November 18/19
On Saturday, November 18, the backtracking begins. Altman’s Friday termination notice states that, “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.”
The following morning, OpenAI COO Brad Lightcap wrote in internal communications obtained by Axios that the decision “took [the management team] by surprise” and that management had been in conversation “with the board to try to better understand the reasons and process behind their decision.”
“We can say definitively that the board’s decision was not made in response to malfeasance or anything related to our financial, business, safety, or security/privacy practices,” Lightcap wrote. “This was a breakdown in communication between Sam and the board … We still share your concerns about how the process has been handled, are working to resolve the situation, and will provide updates as we’re able.”
A report from The Information midmorning Saturday revealed that OpenAI’s prospective share sale being led by Thrive Capital, valued at $86 billion, is in jeopardy following Altman’s firing. Per three unnamed sources within the company, even if the sale does go through, it will likely be at a lower valuation. The price of OpenAI shares has tripled since the start of the year, and quadrupled since 2021, so current and former employees, many of whom were offered stock as hiring incentives, were in line for a big payout. A payout might not be coming anymore.
On Saturday afternoon, Altman announced on Twitter that he would be forming a new AI startup with Brockman’s assistance, potentially doing something with AI chips to counter NVIDIA’s dominance in the sector. At this point OpenAI’s many investors, rightly concerned that their money was about to go up in generative smoke, began pressuring the board of directors to reinstate Altman and Brockman.
We remain committed to our partnership with OpenAI and have confidence in our product roadmap, our ability to continue to innovate with everything we announced at Microsoft Ignite, and in continuing to support our customers and partners. We look forward to getting to know Emmett…
— Satya Nadella (@satyanadella) November 20, 2023
Microsoft’s Satya Nadella reportedly led that charge. Bloomberg’s sources say Nadella was “furious” over the decision to oust Altman — especially having been given just “a few minutes” of notice before the public announcement was made — even going so far as to recruit Altman and his cohort for their own AI efforts.
Microsoft also has leverage in the form of its investment, much of which is in the form of cloud compute credits (which the GPT platform needs to operate) rather than hard currency. Denying those credits to OpenAI would effectively hobble the startup’s operations.
Interim-CEO Mira Murati’s 48-hour tenure at the head of OpenAI came to an end on Sunday when the board named Twitch co-founder Emmett Shear as the new interim-CEO. According to Bloomberg reporter Ashley Vance, Murati had planned to hire Altman and Brockman back in a move designed to force the board of directors into action. Instead, the board “went into total silence” and “found their own CEO Emmett Shear.” Altman spent Sunday at OpenAI HQ, posting an image of himself holding up a green “Guest” badge.
“First and last time i ever wear one of these,” he wrote.
Monday, November 20
On Monday morning, an open letter from more than 500 OpenAI employees circulated online. The group threatened to quit and join the new Microsoft subsidiary unless the board itself resigns and brings back Altman and Brockman (and presumably the other two as well). The number of signatories has since grown to nearly 700.
It doesn’t look like that will be happening, however — despite Sutskever’s early morning mea culpa. The board has already missed its deadline to respond to the open letter, Microsoft has already hired away both Altman and Brockman and Shear has already been named interim-CEO.
Shear stepped down as CEO of Twitch in March, where he led the company for more than 16 years and has been working as a partner at Y Combinator for the past seven months. Amazon acquired the live video streaming app in 2014 for just under $1 billion.
“I took this job because I believe that OpenAI is one of the most important companies currently in existence. When the board shared the situation and asked me to take the role, I did not make the decision lightly,” Shear told OpenAI employees Monday.
“Ultimately I felt that I had a duty to help if I could,” he added.
Shear was quick to point out that Altman’s termination was “handled very badly, which has seriously damaged our trust.” As such he announced the company will hire an independent investigator to report on the run-up to Friday’s SNAFU.
“The board did *not* remove Sam over any specific disagreement on safety, their reasoning was completely different from that,” Shear continued. “I’m not crazy enough to take this job without board support for commercializing our awesome models.”
Following his departure to Microsoft on Monday, Altman posted, “the OpenAI leadership team, particularly mira brad and jason but really all of them, have been doing an incredible job through this that will be in the history books.”
“Incredibly proud of them,” he wrote.